State ag secretaries call for renewal of blenders credit

May 28, 2010

Secretaries of agriculture in eight states have asked congressional leaders to renew ethanol’s volumetric ethanol excise tax credit, or the 45-cent-per-gallon blenders’ credit, which is set to expire at the end of 2010.

In a letter to leaders in both the U.S. House of Representatives and the U.S.

Senate, the ag secretaries said the tax credit was important to their states.

“As representatives of rural America, we strongly urge you to support the extension of these important policies that allow us to successfully produce domestic fuel,” the letter said. “America’s farmers stand ready to continue their role as providers of food and feed, and are eager to continue to provide renewable fuel as well.”

The letter is signed by secretaries of agriculture Bill

Northey of Iowa; Jon Farris of South Dakota; Robert J. Boggs of Ohio; Doug Goehring of North Dakota; Tom Jennings of Illinois; Jon Hagler of Missouri; Rod Nilsestuen of Wisconsin; and Greg Ibach of Nebraska.

The ethanol industry is fighting to keep the credit in place, as many in the industry believe that without it, they will not be profitable.

That is what has happened to the U.S. biodiesel industry, which has virtually shut down after federal lawmakers let that industry’s $1 blenders’ tax credit expire at the end of 2009.

In a statement, Northey said he’s concerned ethanol would face the same fate without its tax credit.

“The failure to extend the biodiesel tax credit and the damage that has been done to that industry clearly highlight the need to act in a timely manner to make sure these critical policies are in place by the end of the year,” Northey said.

Legislation has been introduced in both the Senate and House to extend the current ethanol tax policies to 2015.

The secretaries said in the letter that ethanol has been important to their rural economies.

“In small communities all across the country, ethanol production is creating jobs, both at biorefineries and in the many small businesses that provide needed goods and services,” the letter said. “These good-paying jobs provide important benefits and put billions of dollars in the pockets of rural families.”

The letter cites a recent study by the University of Missouri’s Community Policy Analysis Center that said more than 39,000 jobs would be lost in the first year without the credit, nearly 116,000 in the second year, and more than 160,000 in the third year.

“America’s farm families and rural communities provide the food, feed and fiber on which our nation and world relies,” the letter said. “Increasingly, they also ‘grow’ renewable fuel sources that help reduce America’s dependence on foreign energy.

“In addition, rapidly developing technologies have the potential to unleash another renaissance for American agriculture. Cellulosic ethanol production will allow corn stalks to join dedicated energy crops, such as switch grass, to increase domestic supplies and provide new economic opportunities in rural America.” — Todd Neeley, DTN