WASHINGTON – US livestock, poultry and meatpacking industry representatives asked six key US Senators on May 4 to abandon the ethanol tax subsidy. They said the subsidy is costing taxpayers billions of dollars per year and increasing the cost of food.

The Volumetric Ethanol Excise Tax Credit (VEETC) allows petroleum companies to claim a credit of 45 cents for each gallon of ethanol that is added to motor fuel, at a cost of the Treasury of approximately $6 billion this year. Although the credit is scheduled to expire at the end of the year, ethanol interests are trying to have it extended.


“Not only would saving the US Treasury $6 billion in lost revenue be a prudent budgetary decision, such action would also be a good and strong signal that it is now time for the 30-year old ethanol industry to begin to compete in the marketplace without the aid of government subsidies,” said the letter, sent on behalf of leaders from the American Meat Institute, National Cattlemen’s Beef Association, National Chicken Council, National Meat Association, National Pork Producers Council and National Turkey Federation.

The allied associations groups made their appeal to Senators Saxby Chambliss (R-Ga.); Mike Crapo (R-Idaho); Tom Coburn (R-Okla.); Richard Durbin (D-Ill.); Kent Conrad (D-N.D.); and Mark Warner (R-Va.), the bipartisan “gang of six” that is attempting to draft a budget compromise for 2012 and beyond.

“A number of studies by well-respected economists have confirmed that eliminating the VEETC would only minimally impact the quantity of ethanol manufactured as the quantity relates to the Renewable Fuels Standard,” the groups added.