Most of you don't know that "mandates" are how our elected politicians stab us all in the back. This blog is about how the ethanol mandate screws all of us and we don't even realize that we are being screwed.
When our government passes a tax, it is all out in the open and we realize it when we pay our taxes. In the case of "mandates" the cost is hidden from us. If you read my blog about sugar and the fact that we pay over 5 times as much as the rest of the world for sugar should have opened your eyes. It is a first class screw job! Ethanol is no different. Any place in the world they can produce ethanol for sugar cane or switch grass for much less than we can from corn. The problem is that the "mandate" states that we have to supply a certain amount domestically. Since we have not been able to produce that "mandated" amount, we can't import the cheaper ethanol. Is that demented logic or what?
When the idea of ethanol had it's birth, we were importing oil and the idea was that if we made ethanol from our corn we could reduce the amount of oil we imported. It sounded good at the time, but things have changed and we now produce more oil than we need so there is no need to produce ethanol to fill the gap. The problem is that corn growers have gotten use to getting the "candy" and now we can't take their "candy" away.
When this ethanol deal first started, we were growing 99% of the corn on land that did not need irrigation or was well suited to grow corn economically. With the "mandated" increase in corn production, marginal land was put into production. This made our environment worse. As the prices went up for corn as a result of the mandate, so did the price of farm land. Now, we have a situation where the profit from growing corn on this new expensive land is not worth it. Interesting how our government can screw up a good thing isn't it?
We talk about competition and the free enterprise system and capitalism, but in the end our government doesn't seem to be able to keep their hands off. What we now have is the situation where we gave candy to the baby and now we have to figure out how to take the candy back. It is happening all over the place and you all know it!
When our government passes a tax, it is all out in the open and we realize it when we pay our taxes. In the case of "mandates" the cost is hidden from us. If you read my blog about sugar and the fact that we pay over 5 times as much as the rest of the world for sugar should have opened your eyes. It is a first class screw job! Ethanol is no different. Any place in the world they can produce ethanol for sugar cane or switch grass for much less than we can from corn. The problem is that the "mandate" states that we have to supply a certain amount domestically. Since we have not been able to produce that "mandated" amount, we can't import the cheaper ethanol. Is that demented logic or what?
When the idea of ethanol had it's birth, we were importing oil and the idea was that if we made ethanol from our corn we could reduce the amount of oil we imported. It sounded good at the time, but things have changed and we now produce more oil than we need so there is no need to produce ethanol to fill the gap. The problem is that corn growers have gotten use to getting the "candy" and now we can't take their "candy" away.
When this ethanol deal first started, we were growing 99% of the corn on land that did not need irrigation or was well suited to grow corn economically. With the "mandated" increase in corn production, marginal land was put into production. This made our environment worse. As the prices went up for corn as a result of the mandate, so did the price of farm land. Now, we have a situation where the profit from growing corn on this new expensive land is not worth it. Interesting how our government can screw up a good thing isn't it?
We talk about competition and the free enterprise system and capitalism, but in the end our government doesn't seem to be able to keep their hands off. What we now have is the situation where we gave candy to the baby and now we have to figure out how to take the candy back. It is happening all over the place and you all know it!
