Ethanol Boom Helps Cut $31 Billion From Farm Subsidies

NewsMax.com ^ | Jan. 24, 2007 | staff

[kellynla]

WASHINGTON -- The fuel ethanol boom and high crop prices will cut U.S. farm subsidy spending by $31 billion through 2016, a dramatic drop in the cost of the farm program, the Congressional Budget Office said on Wednesday.

In a semiannual report, CBO estimated farm subsidies would cost $10 billion this year and the annual cost "will range between $8 billion and $10 billion over the next decade."

The forecasts are expected to constrain this year's overhaul of farm policy by Congress. The 2002 farm law, which allocates about $20 billion a year on farm supports, expires in the fall.

Large U.S. farm groups want to maintain the current crop support system. The American Farm Bureau Federation asked on Dec. 6 that Congress and the Bush administration assure that funding "be sustained at levels authorized in the 2002 farm bill with adjustment for inflation."

Congress has a target of agreeing by April 15 on a spending outline. Leaders of the House and Senate Agriculture committees say they will not begin work on farm subsidy programs until it is clear how much money will be available.

"Projected spending . . . has declined by $31 billion for the 2007-2016 period," said the CBO report. "That reduction primarily reflects lower income-support payments to farmers for major crops because commodity prices are now expected to be higher than previously anticipated.

"In particular, CBO has reduced its estimates of support payments to corn producers as a result of stronger demand for ethanol."

Corn prices have doubled since last fall and are the highest in a decade. Soybean and wheat prices rose as well, pulled up by corn.

[flashbunny]

and consumers pay either way.

[curiosity]

Yeah, but I wonder how much that is offset by increased spending on ethanol subsidies.

[SpaceBar]

Yup. Ain't no free lunch.

George Bush has a Rendezvous with Density

[devane617]

Corn has doubled in price in the past year. From the reports I have read, it is largely due to Ethanol production. Either way, consumers pay the price.

[Lusis]

Hey, I got an idea to cut farm subsidies even further:

Eliminate them

[kellynla]

and if you don't know that we are paying BIG TIME by using gasoline;
you are the most naive person on the planet! LMAO

the difference is by coming up with alternative sources of energy;
we are getting off our foreign oil dependency.

[Mr. Lucky]

Not a big deal, I don't suppose, but the author of the article you link to can't tell a stone cliff from a pile of corn.

[appeal2]

54 cents per gallon. Header is deceptive, should read "Ethanol Boom Shifts Subsidies."

[curiosity]

54 cents per gallon. Header is deceptive, should read "Ethanol Boom Shifts Subsidies."

You said it.

[Mr. Lucky]

I should have mentioned, a corn pile has an angle of repose of 23 degrees.

[bert]

It occured to me today that I should look for the Tennessee Valley Authority to enter this business. They are in the energy business and it seems a natural for them.

They have coal fired and nuclear power plants all up and down the Tennessee River valley that extends into Alabama and Kentucky.They also have extensive research facilities in Alabama to study the problem. They could easily set up stills to run off the spent steam used to turn the turbines. The cost of the heat and steam would be free. There are beacoup acres of farmland to raise corn or other fermentable crop.

[bert]

......Ain't no free lunch......

Well almost free..... see my post 12 below

[muleskinner]

Rush said something about the prices of corn tortillas in Mexico have started going up and the locals are getting restless.

[SpaceBar]

Freestanding angles of internal friction of particulate matter aside, what part of the article do you disagree with?

[kellynla]

Sounds reasonable to me, but whatever the sources whether they be ethanol, biodiesel, nuclear or whatever; we've been down this road since the seventies and it's time to FINALLY get off the dime and start resolving the problem!

If we had done in the seventies what Brazil started doing;
we would be totally self-sufficient today as Brazil is.

Personally, I quit commuting in 1979, started working out of my house and never looked back.

[bert]

.....I quit commuting in 1979, started working out of my house and never looked back.....

I downsized my company to "me" in 1994. My little business has grown and I no longer commute. However, I have developed clients far flung places and drive in excess of 500 miles a month to serve them. go figure

[UpAllNight]

--They could easily set up stills to run off the spent steam used to turn the turbines.--

A little research would show that the temperature of the 'spent steam' in not adequate to run a still.

[tacticalogic]

I wonder how much that is offset by increased spending on ethanol subsidies.

I wonder why we have to wonder about it. Seems like they ought to be telling us up front.

[Cloverfarm]

As far as energy independance, we are smart enough in this country to do it. We just haven't had the will for years.

As far as farm subsidies, not every farmer participates because it's a one-size-fits-all program but doesn't work for all farms. DH and I participated in the Milk Income Loss Program for about 18 months. It just prolonged the agony until we sold the dairy cows.

After that, it's been all free market. Since we don't have highly productive corn ground we've gone into specialized products -- hay for horses; and freezer beef.

I hate to hear people complaining about farm prices, though, especially when almost everyone in our country looks pretty fat and happy ;-)

For perspective -- we are basically living on DH's income on straight sales. We aren't living high on the hog, but that's our own fault for the choices we made. Not blaming anybody else -- not the government and not consumers.

Ann