Why Ethanol is a Good Idea
Many people will tell you that ethanol is nothing more than a economically inviable scheme to prop up farmers that would otherwise fail. The argument goes that if the government were not providing subsidies for ethanol in all its phases (from the funding the actual ethanol plant, to laws encouraging or even requiring the use of ethanol as a fuel) then the ethanol industry would show its true colors and fall flat on its face.
Folks, I'm here to tell you that's all probably true. I'm also here to tell you that I wholly support these ethanol subsidies. Nuts! you say? Well here's my logic.
Using corn to produce ethanol can serve consumers--by artificially stabilizing corn prices. When corn prices would naturally be low (presumably along with a significant surplus supply of corn)--we send the extra corn to produce ethanol. The quantity of corn demanded goes up, the price stays up, and the farmers vital to our survival stay in business--beefing up the margins they can operate on a bit.
Likewise, if corn prices are high (presumably with a relative scarcity of corn) we can shut down the ethanol plants. The quantity of corn demanded goes down, the price doesn't go through the roof and you, I and the beef farmer get to save a little cash.
Still sounds like a scheme to keep inefficient farmers afloat? Well, I disagree with that too--it serves not only our bank accounts, but also our NATIONAL SECURITY to both have an abundance of food (corn) and to have relatively stabile prices for food.
Certiainly the situation is more complex than I can explore in these few paragraphs--but I really do think this logic is sound...think about it for yourself.
P.S. Credit where credit is due--Dr. Galen Suppes, Professor of Chemical Engineering at the University of Missouri-Columbia orginally got me thinking along these lines. And Dr. Abner Womack, Director of FAPRI didn't hurt a thing by explaining some of his organizations VERY complex agricultural models to me (...not to be interpreted that either has reviewed or agrees with me in the above content...though they may well....who knows...)