General Mills CEO: Ethanol Subsidies Must Go
It’s no secret that people in the food manufacturing and distribution businesses are against subsidies for the domestic ethanol industry. A RetailWire poll last month found 94 percent were strongly against subsidies, while only three percent were strongly in favor.
According to U.S. Department of Agriculture, 38 percent of domestic corn production is used for ethanol and that’s too much, according to Ken Powell, chief executive of General Mills.
Mr. Powell told the Financial Times, "We’re driving up food prices unnecessarily. If corn prices go up, wheat goes up. It’s all linked."
While many around the country and in the nation’s capital agree that large subsidy programs such as the one for ethanol no longer make sense in light of current economic realities, politicians, particularly Republicans, appear hamstrung by groups such as Americans for Tax Reform who see the end of subsidies as a form of tax increase.
Americans for Tax Reform came out strongly against a budget proposal put forth by Sen. Tom Coburn (R – OK) that would eliminate ethanol subsidies to the tune of $6 billion unless Congress voted to end the Estate Tax (AKA Death Tax).
- Senate Votes to End Ethanol Credit – RetailWire
- General Mills hits out at ethanol subsidies – The Financial Times (reg. required)
- Coburn deficit plan offers $9 trillion in savings – The Washington Post
- Dr. Coburn Releases $9 Trillion Deficit Reduction Plan – U.S. Senate
- Coburn: "I Support Ethanol" – Americans for Tax Reform
- Coburn Amendment half-baked without DeMint Fix – Americans for Tax Reform
Discussion Questions: Do you agree that ethanol subsidies are no longer needed? How can the food manufacturing and distribution industries make this happen in light of current economic and political considerations?