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NCBA supports legislation to end ethanol subsidy

National Cattlemen's Beef Association President Bill Donald said the Ethanol Subsidy and Tariff Repeal Act, which was introduced May 3 by U.S. Sens. Tom Coburn (R-OK) and Dianne Feinstein (D-CA), would end 30 years and more than $30 billion of taxpayer support for the corn-based ethanol industry and would finally level the playing field for all commodities relying on corn as a major input. The legislation would repeal both the Volumetric Ethanol Excise Tax Credit and the tariff on imported ethanol by no later than June 30.

"NCBA supports the development of renewable and alternative fuels and we know ethanol plays a role in reducing our dependence on foreign oil. However, we don't support forcing taxpayers to prop up an industry that should be able to stand on its own two feet," said Donald, who is also a cattleman from Melville, Mont. "Senators Coburn and Feinstein should be commended for their leadership on this issue and for introducing this common-sense legislation that will not only level the playing field for a bushel of corn but will also save taxpayers more than $6 billion annually."

Donald said the VEETC and the ethanol import tariff put other end-users of corn, including cattlemen and women, at a severe competitive disadvantage. From December 2007 to February 2010, the cattle feeding sector of the beef industry lost a record $7 billion in equity due to high feed costs and economic factors that have negatively affected beef demand. Between 2005 and 2008, corn prices quadrupled, reaching a record high of $8 a bushel and are more than $7 a bushel today. Donald said this volatility in the marketplace was a result of ethanol mandates and subsidies artificially pushing feed costs higher.

"It's no secret that supplies are tight. In fact, the U.S. Department of Agriculture has predicted ethanol will account for 40 percent of this year's corn crop. All we are asking is to compete head-to-head for a bushel of corn. That's what this legislation will accomplish," Donald said. "The federal government shouldn't be in the business of picking winners and losers. We urge all senators to take a stand on the side of good government and support this legislation."

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