Are Corn Ethanol Farm Subsidies Too Complex to Understand?
Several bits of news trickled out this week that, when put together, indicate great confusion even among experts about whether or not corn ethanol government subsidies are helping or hurting.
To start with, researchers at Iowa State University have found that, even though $1.3 billion was given to the corn ethanol farming industry in the form of subsidies in 2007, the government saved $3.45 billion on what are called loan deficiency payments as a direct result of these ethanol subsidies.
Loan deficiency payments were established in 1985 as a way to ensure farmers’ incomes remained steady even when prices for commodities such as corn were abnormally low. Since 1998 the loan deficiency payment program has cost taxpayers more than $29 billion.
