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TSCRA
Daily News Update, April 25, 2008
Gov. Perry seeks relief from skyrocketing food prices
Seeking immediate relief from
skyrocketing food costs, Gov. Rick Perry Friday asked the federal government
for a 50 percent waiver from the federal renewable fuel standard (RFS) mandate
for ethanol produced from grain.
"We appreciate the goodintentions behind the push for renewable fuels. In fact we're diversifying our
state's energy portfolio at a rapid rate, but this misguided mandate is
significantly affecting Texans' family food bill," said Gov. Perry.
"There are multiple factors contributing to our skyrocketing grocery
prices, but a waiver of RFS levels is the best, quickest way to reduce those
costs before permanent damage is done."
Corn prices rose 138 percent
globally over the last three years and global food prices increased 83 percent
over the same time period. With the implementation of the new RFS mandate, some
estimates predict corn prices will rise to $8.00/bushel for the 2008 crop,
resulting in a negative impact of $3.59 billion to the state.
While well intentioned, the RFS
mandates the levels of renewable fuel usage regardless of market signals. The
artificial demand for grain-derived ethanol is devastating the livestock industry
in Texas and needlessly creating a negative impact on our state’s otherwise
strong economy while driving up food prices around the world.
Overall, the
Texas economy is the strongest in the nation, primarily because of
market-driven policies.
Texas plays a significant role in
feeding and fueling the nation. Not only is our state the nation's largest
beef-producer, Texas also ranks in the top 10 states in poultry/egg and dairy
production, which rely heavily on corn-based products for feed. Texas is also a
leading producer of the nation's domestic fuel supply.
The impact on the cattle industry
is particularly harmful to family ranches. According to the USDA, two-thirds of
the 149,000 cattle producers in Texas have fewer than 50 head of cattle.
Granting this waiver will provide
all Texans much needed relief at the grocery store, and it will enable the
Texas livestock industry to continue providing its significant share of our
nation's food supply.
In 2007, 25 percent of the U.S.
corn crop was diverted to produce ethanol, according to the United States
Department of Agriculture, which projects that 30 to 35 percent will be
diverted in 2008. With ever increasing mandates of corn crop diversion to
ethanol production through 2015, the impact on food prices globally, and to
Texas specifically will only worsen.
The RFS program was established bythe federal government through the Energy Policy Act of 2005. It was amended in
2007 by the Energy Independence and Security Act, which increased the RFS
mandate.
Click here to see attached letter from Gov. Perry to EPA Administrator Stephen Johnson.
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