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Officials Respond to Call to Cut Corn-Ethanol Production

by 5m Editor
14 August 2008, at 5:12p.m.

NORTH LITTLE ROCK, ARKANSAS - Two members of the state's congressional delegation stopped short of saying on 12 August that federally mandated corn-ethanol production levels should be reduced to hold down the cost of chicken feed.

The energy industry's demand for corn has inflated input costs for poultry operations, forcing some to shutter facilities and cut jobs, including Pilgrim's Pride, which announced on 11 August that it would idle a plant in Clinton and lay off 360 employees, according to Arkansas News Bureau. In June, the company announced it would lay off 600 in El Dorado.

Pilgrim's Pride and the National Chicken Council put at least part of the blame on an energy bill passed in December that requires 9 billion gallons of ethanol to be blended into gasoline this year and about 11 billion gallons next year. The Environmental Protection Agency now administers the initiative, the Renewable Fuels Standard.

Last week, the EPA denied a request by Texas Governor Rick Perry to cut the mandate in half for the year, much to the dismay of business and industry leaders, as well as the Texas Congressional delegation.

Poultry is a multi-billion dollar industry in Arkansas.

"This issue of the impact that the increasing energy costs have on industry is not going to go away," Vic Snyder (Democrat, Arkansas) said.

"In my view, there's not a simple solution such as, 'Oh, we'll just lower this mandate or alter that mandate.'"

Mr Snyder joined Governor Mike Huckabee and US Senator Blanche Lincoln (Democrat-Arkansas), in dedicating the gas-to-energy plant at Two Pine Landfill in North Little Rock. Using methane gas collected from decomposing waste, the facility provides power for about 4,500 homes in the city.

Arkansas Governor Beebe said a transition must be made from corn-based ethanol to cellulosic-based ethanol, as did Senator Lincoln. Neither called on Congress to lower the federal mandate.

"People realize that corn-based ethanol is a dead-end street," Senator Lincoln said. "There's a certain amount of corn that can be used, but there's no doubt that it's put added pressures on other agricultural products and we need to move forward."

Congress decreased ethanol tax credits in the farm bill to minimize the incentives of using corn in ethanol, she said.

5m Editor