The president of the Texas Farm Bureau said today that the Grocery Manufacturers Association (GMA) has launched “round two of their vicious smear campaign against the U.S. biofuels industry.”

The GMA requested this week that the refiners’ credit for ethanol production be diverted strictly to the development of “cellulosic” ethanol, which can be made from raw materials such as wood chips, crop residue and some grasses. Most ethanol in the U.S. today is produced from corn.

Texas Farm Bureau President Kenneth Dierschke said the cellulosic product has much promise, but the credit at the refiners’ level is still the best way to encourage development of the biofuels industry.

“The GMA claim that goes with this request is false,” Dierschke said. “The very brief spikes in the price of corn had very little to do with high food prices and a lot to do with high energy costs and high profits at the retail level.”

Dierschke noted that the price of corn has plummeted to less than half of the highs witnessed last summer, yet food prices remain very near the same levels that were blamed on the price of corn.

The American Farm Bureau Federation Convention recently concluded in San Antonio did nothing to lessen the organization’s enthusiasm for biofuels, especially ethanol. Farm Bureau policy was modified in favor of allowing higher blends of ethanol with gasoline as long as the blends do not require modifications of existing engines.

“We still see biofuels like ethanol as part of the energy future of America,” Kenneth Dierschke said. “I think it’s very significant that a general farm organization, comprised of both farmers and ranchers adopted this kind of policy.”

Dierschke said that efforts to pit livestock producers and grain farmers against one another on the ethanol issue have failed.

“The truth on this issue has been twisted to fit many agendas,” Dierschke said. “Right now, the price of fossil fuels is low, but we understand that ethanol will continue to play a major role in reducing our dependence on foreign oil.”