According to the university’s research report, Hamda found:
• “Ethanol production used less than 5 percent of the nation’s corn in 1990-91, or 333 million bushels, but used as much as 24 percent — 3.1 billion bushels — by 2007-08.”
• “The increasing rate of corn for ethanol use has affected the availability of corn for feed and exports.”
• “About 60 percent of South Dakota’s corn went into ethanol production by 2007-08, the highest proportion of any state. In Iowa the figure was 50 percent; in Nebraska, 40 percent; and in Minnesota and Illinois, 30 percent.”
• The level of South Dakota’s corn production linked to ethanol “implies a heightened level of dependency and vulnerability of South Dakota’s agriculture economy to the industry.”
There are three negatives at work here. First, the unmentioned, but extensive, taxpayer subsidies received by ethanol producers, with no benefit for the environment or the economy. Second, the higher food costs resulting from corn production being diverted to or expanded for ethanol. Third, greater reliance of farms, businesses and regional economies on an industry that cannot be sustained in the open market, and must be supported by government.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
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