Biodiesel Get’s a $1 Gallon Subsidy!
While biodiesel producers are presently receiving a $1 a gallon federal tax subsidy, they think that even more aid would help them compete more effectively.
In testimony before Congress, John Hoffman, first vice president of the American Soybean Association (ASA-www.soygrowers.com), called for extension of the biodiesel tax incentive which has spurred growth in the US biodiesel industry and authorization of a Biodiesel Incentive Program under which US biodiesel producers would receive a commodity reimbursement from the Commodity Credit Corporation equal to subsidies paid to foreign biodiesel exporters.
He recalled that, “biodiesel provides a key new market for US soybean oil, which has historically been in surplus, resulting in lower soybean prices. Efforts to establish biodiesel as a viable renewable fuel received a major boost when Congress enacted the biodiesel tax incentive.”
For its part the National Biodiesel Board joined the ASA in seeking an additional federal subsidy of 43 cents per gallon in the 2007 farm bill. Some states are taking action, as well.
Two years ago the biodiesel industry was starting to take off. You’d think with the retail price of diesel being $1/gallon more than it was then that they’d be making a strong profit without a subsidy.
Or maybe the subsidy’s about the government creating winners and losers not about getting a fledgling industry off of the ground.
The fact of the matter is if biodiesel was needed the market would supply it without a subsidy. Government interference in the market makes some people winners while the rest of us pay more in taxes or in the products we buy.
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