Sen. Charles Grassley (R, Iowa) says it’s too early to consider rolling back biofuel incentives to lessen the economic impact of high crop prices. Suspending tax credits for biofuels or temporarily waiving the ethanol usage mandate would discourage investment in the industry, he said. Currently, the Environmental Protection Agency is considering a request from Texas Gov. Rick Perry to suspend the ethanol mandate, which requires refiners to use 9 billion gallons of ethanol this year.

 “You’re going to have this nervousness all through the summer, and you shouldn’t make any decisions like this until you know what the crop is at the end of the harvest season,” Grassley said. Corn and soybean prices already were at historic highs before skyrocketing this month as flooding destroyed crops across Iowa and other Midwest states. The first indication of the extent of the damage will come June 30, when the USDA releases its annual survey of crop plantings. USDA’s first survey-based forecast of the fall harvest will come in August.

Grassley has asked USDA to release former cropland from the 35-million-acre Conservation Reserve Program so that it can be planted quickly to soybeans and other crops and soften the flooding’s impact on commodity prices.  A USDA spokesman says the idea is under consideration. But CRP land provides prime habitat for game birds and other wildlife, so conservation groups strongly oppose the proposal.

Source: Des Moines Register