The power of Big Corn

THE NATION'S growing appetite for ethanol as an alternative motor fuel is so great that one environmental group warns of a corn shortage, which could raise prices for the many corn-based food and drink products the nation consumes. This competition for corn, though, could be easily avoided if Congress would do away with the tariffs and import restrictions that keep the United States from making greater use of sugar-based ethanol, which requires much less energy than the corn-based version.

The advantages of ethanol are that, when blended with gasoline, it reduces a vehicle's greenhouse gas emissions; it is renewable; and it cuts down on US dependence on foreign oil imports. With the fervent support of farmers, Congress has showered corn-based ethanol with a generous tax credit and a mandate that the fuel industry use a minimum amount of it annually.

All of this has led to a building boom in corn distilleries. The environmental advocacy group Earth Policy Institute looked closely at the industry and came to the conclusion that a shortfall in corn could develop. According to the institute, 79 ethanol plants are under construction, not the 62 estimated by the Renewable Fuels Association, a trade group, late in December. By 2008, all these new plants could lead to a doubling of ethanol production and would require more than half of that year's projected corn crop.

The country is relying on corn for ethanol even though it is far from ideal for the purpose. The ratio of energy gained versus the energy needed to plant, fertilize, and harvest the crop is poor, and corn crops are notoriously hard on soil. With technological advances, scientists hope to be able to replace corn with agricultural waste or a non food plant like switchgrass.

In the meantime, sugar cane could be used to produce ethanol with much less investment in energy. But domestic sugar growers get such a high price for their product due to government price-fixing, tariffs, and import restrictions that it would be uneconomic for them to turn to ethanol production. Those same tariffs and import limits make it impossible to import any of the world's abundant supply of sugar and turn it into ethanol. And just to make sure that no one imports cheap Brazilian sugar-based ethanol, Congress has protected the Corn Belt with a 51 cent per gallon tariff on foreign ethanol.

The result is that ethanol in the United States uses more energy and costs more than it has to, and American drivers use less of it than they would with a freer market. The Earth Policy Institute report points to a further cost to corn farmers' grip on Congress: excessive use of the crop for ethanol could drive up food prices. The country would benefit if Congress would get out of the way and let sugar-based ethanol compete on a level playing field.