Representatives from state government, the agriculture community, and the ethanol industry all say the Environmental Protection Agency’s proposed 2014 Renewable Fuel Standard (RFS) biofuels requirements would have a negative impact on agriculture and rural economies.
During a telephone press discussion today about the proposal Iowa Governor Terry Branstad said he was proud of his state’s leadership in biofuels production and he believes lowering the volume obligations would be detrimental for jobs and land values in rural America. “I’m concerned that this would be devastating to what has been a robust economic recovery” in the agricultural heartland of America, said Branstad. “I think the president’s made a terrible mistake caving in to Big Oil on this issue.” The governor launched a new website in response to the EPA proposal – ProtectTheRFS.com – which is collects commenting from citizens about the proposed changes and sending them to the EPA.
American Farm Bureau economist Matt Erickson noted that the proposal has already led to lower futures prices for corn, which could mean 2014 will see prices below the cost of production. “Looking at USDA’s cost of production forecast, the breakeven for corn for 2014 is forecasted to be over $4 a bushel,” Erickson said, explaining that if it drops much lower than that, farmers will be losing money. “This would really be the first time we’d seen this on a national scale since 2005.”
Reducing America’s dependence on foreign oil was the primary objective of the RFS, but “revitalizing rural communities, boosting farm income and reducing farm program costs were also important policy objectives,” said Renewable Fuels Association president and CEO Bob Dinneen. “The RFS has certainly helped to do that and this proposal will reverse that policy as well.”
Listen to comments from Branstad, Erickson and Dinneen with questions from the media here: Comments on RFS Proposal Negative Impacts