Van Beek



Wednesday, July 9, 2008

Coalition letter urges Bush to suspend ethanol import tariff



WASHINGTON -- Agricultural and food industry companies and organizations concerned about the skyrocketing price of corn have sent a letter to President Bush urging him to exercise emergency authority and immediately suspend the duties and quotas on imported ethanol used as a motor fuel additive.

The signatories, representing 35 groups, pointed out that the combination of the federal mandate requiring the use of ethanol in motor gasoline and a steep tariff designed to keep out foreign ethanol has sharply increased the pressure on domestic corn stocks and has greatly contributed to the tripling of corn prices and food price increases in the U.S.

"The suspension of the 54-cent per gallon duty on ethanol will benefit Americans by introducing market competition for a product that is mandated and foster downward pressure for domestic ethanol and its feedstock," primarily corn, the letter said. "Domestic dairy, livestock and poultry farmers, food and beverage manufacturers, employees in these industries and American food consumers will benefit from this action," the letter notes.

Suspension of the tariff will help producers, processors and consumers who are being directly and immediately impacted by rising feed and food prices due to the government mandate to convert nearly 30 percent of the domestic corn crop into fuel, the letter said. The president can immediately suspend the tariff using the authorities provided by the Constitution, the National Emergencies Act, Tariff Act of 1930, Trade Expansion Act of 1962 and the International Emergency Economic Powers Act, the letter added.

Signing the letter were American Meat Institute, American Bakers Association, American Beverage Association, Butterball LLC, Cal-Maine Foods Inc., Capitol Land & Livestock, Citizens Against Government Waste, Coca-Cola Co., Darden Restaurants Inc., Dean Foods Co., Georgia Poultry Federation, Grocery Manufacturers Association, Indiana State Poultry Association, International Food Distributors Association, Iowa Turkey Federation, Minnesota Turkey Growers Association, Mountaire Corp., National Cattlemen's Beef Association, National Chicken Council, National Council of Chain Restaurants, National Milk Producers Federation, National Pork Producers Council, National Restaurant Association, National Taxpayers Union, National Turkey Federation, North Carolina Poultry Federation, PepsiCo Inc., Pilgrim's Pride Corp., Smithfield Food Inc., Snack Food Association, Taxpayers for Common Sense, Tyson Foods, United Egg Producers, United Egg Association and Virginia Poultry Federation.

The letter was sent July 2, the day after U.S. Senator Richard Lugar (R-Ind.) told President Bush that "to demonstrate leadership, the United States should lift the tariff on Brazilian ethanol that now shelters the U.S. industry" and two days after a USDA report said severe flooding in the Midwest had reduced the amount of land being used for corn production.

The letter said that suspending the duties and tariff will bring market competition and "benefit Americans by removing a tariff that many consumers are paying at the fuel pump for gasoline blended with ethanol."

The letter notes that this spring Federal Reserve Chairman Ben Bernanke said Congress it should eliminate the tariff on ethanol to ease food inflation. "This type of action could also benefit the more than 15 million people employed in animal agriculture, food and beverage manufacturing, and food service segments of the U.S. economy," the letter notes.

Van Beek




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