Study shows RFS would reduce farm payments

By | October 01, 2002
A new study released by the National Corn Growers Association (NCGA) showed that increasing demand for renewable fuels like ethanol and biodiesel would boost agriculture economy and save taxpayer money. Using the 2002 Farm Bill as the baseline, the study projected the impacts of enacting a five billion gallon RFS as was passed by the Senate. The study, conducted by nationally renowned agriculture economist John Urbanchuk, found: "An increase in the demand for renewable fuels of the magnitude [called for in the energy bill] would have significant positive implications for energy security, the agricultural sector, and the economy." According to the findings, enacting a 5 billion gallon RFS would: Increase corn prices by 6.8 percent over baseline levels, increase soybean prices by 4.4 percent above baseline levels, boost net farm cash income by nearly $51 billion over the baseline through 2012 and reduce direct government payments to farmers by $5.9 billion through 2012. "An RFS would considerably raise farm income, as well as boost economies in rural America," said NCGA president Tim Hume. "In turn, the U.S. government could reduce spending on agriculture programs and save taxpayers nearly six percent in monetary assistance for direct government payments to farmers."