MODESTO, Calif. – Twenty-one agricultural and business organizations were recently joined by the United Food and Commercial Workers Union 8 in supporting Assembly Bill 523 (Valadao), which would end state subsidies for the production of corn-based ethanol. The California Poultry Federation relayed.

"As the legislature works to bridge a crippling budget deficit, and California's working families continue to struggle with cuts to vital state services and the ongoing economic downturn, it is fiscally irresponsible to subsidize an industry that negatively impacts food supplies and price, as well as jeopardizes much needed jobs throughout the Central Valley," wrote UFCW President Jacques Lovell.

He joined organizations such as the Modesto-based California Poultry Federation (CPF) and Western United Dairymen in supporting legislation introduced by Valley Assemblyman David Valadao of Hanford.

According to a letter submitted by the business organizations, including CPF President Bill Mattos and Western United President Michael Marsh, funding from the "Alternative and Renewable Fuel and Vehicle Technology Program," created by AB 188 (Nunez) in 2007, is being used in California to subsidize possibly as few as two California plants producing corn-based ethanol.

"As much as $6 million has already been set aside for the subsidy program and up to $9 million more could be dedicated by the California Energy Commission to the ill-conceived effort," they wrote.

Legislators were also asked by the groups to consider the following:

  • Increased demand and competition for corn resulting from growth in corn-based ethanol production has driven up the price of corn to over $7 bushel, more than doubling in price from just last year.
  • Higher corn prices directly impact California families through higher food prices. Corn is a basic ingredient in thousands of food items and rising prices affects families of all income levels, particularly low income households.
  • Rapidly rising corn prices are also having a highly detrimental effect on undeveloped and developing countries and exacerbating world hunger.
  • California poultry, dairy and cattle producers, heavily impacted by the cost of feed, are being decimated by the run-up in corn prices. These businesses have seen multi-million dollar increases in weekly feed costs over the previous year and costs are continuing to rise. Collectively these industries provide more than 500,000 California jobs and face financial ruin.