Grocery Manufacturers Association Calls for US Reform of Biofuel Policies

The same factors that caused a ‘perfect storm’ for commodity prices in 2008 are once again contributing to rising food and food ingredient prices, including strong global demand, poor weather, rising energy costs, commodity speculation, and trade restrictions.

4/15/2011 --- Grocery Manufacturers Association (GMA) Vice President for Federal Affairs Scott Faber testified before the U.S. Senate Committee on Environment and Public Works regarding federal biofuels policies.

“The same factors that caused a ‘perfect storm’ for commodity prices in 2008 are once again contributing to rising food and food ingredient prices, including strong global demand, poor weather, rising energy costs, commodity speculation, and trade restrictions. However, one difference between 2008 and 2011 is that even more of our food and feed is being diverted to produce fuel.

“Today, nearly 40 percent of U.S. corn production is diverted from food and feed to produce more than 13 billion gallons of corn ethanol.   Many experts have confirmed the link between corn ethanol and higher commodity prices, including researchers at the Congressional Budget Office and the U.S. Department of Agriculture.

“We urge Congress to freeze the amount of corn ethanol that must be blended into gasoline to provide advanced fuels more time to reach commercial scale.  In addition, Congress should immediately end the Volumetric Ethanol Excise Tax Credit (VEETC) and instead invest in advanced fuels.  Congress should reject proposals to redirect the VEETC to corn ethanol infrastructure and instead invest in advanced fuels that that do not pit our energy security needs against our food security needs.

“The time is now for Congress to reform federal biofuels policies.”