In comments submitted to the Environmental Protection Agency, Texas Corn Producers Board (TCPB) and Corn Producers Association of Texas (CPAT) urged Administrator Stephen Johnson to reject Texas Governor Rick Perry’s request for a waiver of the renewable fuels standard (RFS).
TCPB and CPAT criticized the governor’s claims that disregard the facts about ethanol and its benefits to the economy of Texas.
“Governor Perry’s waiver request suggests the RFS would hurt the Texas economy by raising food prices for consumers and supporting high corn prices,” the letter stated. “However, his claims were made without supporting evidence. Waiving the RFS would be a mistake and would do little to lower food prices, while further bolstering our dependence on foreign oil.”
This letter cited studies by the U.S. Department of Agriculture, Texas A&M University, the Kansas City Federal Reserve and others that clearly state ethanol production and corn prices have had little effect on consumer food prices, while reducing gas prices by as much as $0.42 per gallon at the pump. These effects are not to the level of severity required for a waiver of the RFS.
“The governor has taken sides with one agriculture sector in an industry comprised of a variety of valuable sectors, each contributing a great deal to the economy of Texas. In 2007, the Texas corn sector provided $2.7 billion to the state’s economy in sales by Texas farmers,” the letter continued.
TCPB and CPAT strongly support the RFS and maintain that it is not the cause of increased corn prices. Relaxing the RFS would do little to support the governor’s claims in his waiver request. The organizations’ letter to the EPA cites the weak U.S. dollar, increasing demand for all food products in the developing world, and large influxes in hedge and index funds as the key drivers in the price of corn.
“A waiver of the RFS would only cause food prices to increase even more by failing to address the consequences of the rising price of oil.”
The letter sent to the EPA from TCPB and CPAT can be found at www.texascorn.org.