Executive Update

GMA Efforts Aid in Ending Ethanol Subsidies

On December 31, 2011, a federal tax credit expired, ending an era where the federal government provided over $20 billion in subsidies for ethanol use.

Once seen as the “silver bullet” for both energy independence and environmental protection, the elimination of this thirty year tax credit became a priority for GMA in recent years, as it has been linked to higher food prices and has produced uncertain environmental benefits.

GMA and its member companies helped change the national corn ethanol policy debate with an aggressive advocacy and earned media effort, centered on the development and activation of a large coalition of more than 100 business associations, hunger and development organizations, agricultural groups, environmental groups, budget hawks, and free marketers dedicated to eliminating federal support for corn ethanol.

Although corn prices dropped in 2009-2010 and the issue fell out of the public spotlight, GMA continued to execute its strategy with the expectation that prices would rebound to record highs, which they did in 2011.

These efforts led to a 73-27 vote by the U.S. Senate in June, 2011, to eliminate the subsidy and trade protection of ethanol use, set to expire at the end of the year.  

"After 30 years and billions in subsidies for corn ethanol, the tide has finally turned against using food for fuel,” said Geoff Moody, GMA Director of Energy and Environmental Policy.