ACGA reminds Federal Reserve Chairman that U.S. economy now depends on strength in the farm sector

Dittrich warns against the drumbeat to eliminate ethanol tariff

Keith Dittrich, Chairman of the Board of the American Corn Growers Association, in a recent letter to the Federal Reserve Chairman Bernanke, warned that elimination of the ethanol tariff would be counter productive to the health of the U.S. rural economy and crippling to the farm sector. Dittrich explained that lifting the tariff would have several compounding impacts that would be detrimental to efforts to revive the U.S. economy and would be shortsighted in many ways if this action were taken, given that the U.S. is the price leader in basic commodities.

Concerns listed in the letter included potential for;

--A severe downward correction in the prices paid to farmers at a time when their production costs have risen 50 percent or more,

--A severe recession in the farm economy, which at present is the only bright spot in the U.S. economy,

--An expansion of the banking crisis to agricultural banks that have provided loans to farmers based upon USDA's long-term commodity price projections which depend on the continuation of the ethanol tariff,

--A slowdown of the agricultural equipment manufacturing sector which is currently at peak production and providing critical U.S. jobs,

--A reduction in federal revenues from both the tariff and farm sector income taxes,

--A crippling of the newly developed renewable energy industry that is helping to reduce our dependence on foreign oil and buffering gasoline prices,

--A step backwards in the race towards finding solutions to climate change and a continuation of the detrimental effects that this change is having on global food production,

--Developing a new dependence on imported fuels from South America,

--Reduced incentives to expand domestic and foreign production to provide raw materials to the global energy and food sectors,

--An entrancement in the positive effects that profitable commodity prices have on the economies of developing countries and small farmers worldwide, and

--A continued trend for global strife due to poor economies and lack of domestic production caused by a historically unprofitable global agriculture

Dittrich cited a historical quote for Chairman Bernanke and President Bush's Administration from William Jennings Bryan when he warned, "Destroy our cities and they will spring up again as if by magic, but destroy our farms and grass will grow in the streets of every city of this nation."

4/7/08
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Date: 4/1/08

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