NCGA Announces Support for Caribbean Basin Initiative Legislation
(8-4-04)
The National Corn Growers Association (NCGA) today announced support for S. 2762, legislation recently introduced by Senate Finance Chair Charles Grassley (R-Iowa) that would lower the cap on the amount of duty-free ethanol imported into the United States from the Caribbean Basin Initiative (CBI) countries.
“After careful review, the NCGA Corn Board, Joint Trade Policy A-Team and Ethanol Committee support the legislation introduced by Sen. Grassley,” said NCGA President Dee Vaughan. “This legislation will effectively eliminate the ethanol import provision in the CBI that allows corporations to circumvent U.S. tariffs on imported ethanol. This law will protect the U.S. economy, taxpayers and U.S. farmers.”
The Caribbean Basin Economic Recovery Act, enacted in 1984, allows up to 7 percent of annual U.S. ethanol consumption to be brought through CBI countries duty-free. Grassley’s bill introduces a fixed cap of 90 million gallons on the amount of ethanol that can benefit from the duty-free provision. This year the U.S. Department of Commerce determined the limit would be 186 million gallons.
Also recently introduced was S. 2769, legislation sponsored by Sens. Tom Daschle (D-N.D.) and Richard Lugar (R-Ind.) that also aims to shield domestic ethanol producers from companies taking advantage of the CBI ethanol import provision. Vaughan said NCGA will review that legislation and its broader implications on the domestic requirements of the Renewable Fuel Standard.
“Our concern is that more domestic companies will take advantage of the 20-year-old statute that was intended to encourage development in the impoverished Caribbean Basin region by avoiding a 54-cent duty on each gallon of imported ethanol,” said Vaughan. “Regarding Senator Daschle’s legislation, we are examining the potential impacts related to our World Trade Organization (WTO) commitments.”
NCGA has worked tirelessly to advance the ethanol market in the United States. This year, U.S. ethanol plants are expected to produce more than 3.3 billion gallons, adding more than $15.3 billion of gross output to the U.S. economy and creating jobs.
The majority of ethanol plants in operation or under construction in the United States are farmer-owned cooperatives. According to the Renewable Fuels Association (RFA), more than 900,000 farmers are members of ethanol production cooperatives. RFA also notes that since 1990, farmer-owned cooperatives are responsible for 50 percent of new production capacity in the United States. Growing domestic ethanol production increases net farm income more than $1.2 billion a year. The resulting boost in the agricultural economy cuts farm program costs and taxpayer outlays, according to RFA.