Agriculture, milk, et al are politcal also, but are subsidies, not the same kind though as for ethanol. For universities and Big Bird...that's a stretch.
Whether the ethanol subsidies go to the blenders or not, I find it difficult to believe that a farmer would sell his crop to the petroleum industry vs. food industry if there wasn't something tangible in it for him. Diversion of food resources away from the main supply drives prices up especially in drought conditions like now.
As for your anecdotal case of ‘fixing’ your own problem, good for you. However, the case against ethanol use in vehicles because of damage and problems isn't merely anecdotal - there are too many cases. Google wideband 02 sensor problems with ethanol, try looking for gas-ethanol problems related to 2 cycle and even 4 cycle engines. There are too many problems just to chalk this up to those evil petroleum spiking their real gas portion with bad gas. I've got more than one 2-cycle carb I've had to replace because the gaskets and diaphragms were ‘melted’.....
I'm not opposed to alternate fuels; I am opposed to the government ramming it down our throats when the auto industry clearly wasn't prepared for it by designing their fuel systems (gaskets and seals that don't dissolve) to keep from corroding and being damaged by ethanol.
BTW, in your case of ‘fixing’ it, there are models of vehicles now that will reset themselves after three successive ‘good starts’...i.e., running three times with no apparent O2 problem which is usually brought on by ethanol and a long fast coast down a level stretch or hill causing back pressure from the cat to the sensor.
Unless you pulled the sensor and looked at it, I'd say your vehicle designers built in that ‘courtesy reset’ for you. My 2010 F150 does that. My 2009 Accord and my 2005 Accord didn't.
They actually sell their grain to ethanol distillers, who compete with the petroleum industry. Farmers have to make ends meet. If you've got a truck with ten tons of grain to sell and the distillery offers you three cents more per bushel than the mill, you go there and get as much money for your grain as you can. Farmers are not in business just to take one for the team. Sorry, Old MacDonald is a capitalist. Plus you can then buy a truck load of used distillers grain to feed your livestock instead of driving back in an empty truck. If the distillery will take high moisture grain, while the mill will dock you a percentage, or not buy it at all, you sell your high moisture grain to the distillery. Ethanol has provided more competition for farmer's grain, helping farmers by providing more options. In short farmers sell to distillers because they compete for the farmer's business and win it. Furthermore if the farmers sold their grain to the mill for three cents less per bushel the mill would then sell the grain to the distillers and pocket the difference. Often times the distillery is built on the same railroad track as the mill for just that reason.