Monday, September 08, 2008

Did Bachmann Lead the Platform Fight Against MN Farmers ?

Michele Bachmann convention speech focused on Minnesota Nice …so, how did our guests respond ?
The RNC enacted a platform that says the "U.S. government should end mandates for ethanol and let the free market work." (Note: As previously stated , Congresswoman Bachmann was part of the Platform Committee.)
Responding, Bruce Stockman, executive director of the Minnesota Corn Grower’s Association (MCGA), said "Here in Minnesota I don't know how you could say something more devastating” He said that the policy was seen as somewhat of a slap in the face to Minnesota and the entire Midwest. “It’s my view that so-goes the Midwest goes the election of the president, ” Stockman continued. “To be so opposed to the renewable fuel standard as a platform seems like not a good decision.”
The position marks a major change from the 2004 platform, and ethanol is a key part of reducing the nation's dependence on foreign oil yet John McCain supports cutting the mandate that requires 9 billion gallons of biofuels, such as ethanol, be blended into gasoline this year and about 11 billion gallons next year.

What’s the motivation for this change ?
The amount of the subsidy (which was reduced in the last Farm Bill) ?
The Food –versus – Fuel debate ?
The desire to promote domestic drilling versus renewables ?

Since the Farm Bill was so contentious and will be in effect for a few more years, the likelihood of changing the subsidy is not realistic.

There is no easy answer to the Food –versus – Fuel aspect of the debate, but reducing tariffs could increase supply.

That leaves “Drill, Baby, Drill”.

The debate should not be whether to provide subsidies for the ethanol industry, but whether we should be providing sweetheart deals for the established oil industry. Bachmann, who voted against the Farm Bill, and the RNC are picking the international oil industry.

As the New York Times reported … industry analysts who compare oil policies around the world said the United States was much more generous to oil companies than most other countries, demanding a smaller share of revenues than others that let private companies drill on public lands and in public waters.” [SNIP] “ “They are giving up a lot of money and not getting much in return,” said Robert A. Speir, a former analyst at the Energy Department who worked on the report. “If they took that money, they could buy a whole lot more oil with it on the open market.”

Some Republicans see the inequity of the subsidy / royality question. As I noted Alaska has raised its tax rates that it collects from the oil industry. Alaska is not alone, Canada’s Alberta province will require oil and gas companies to pay $1.4 billion more a year in royalties.

Why does the GOP pick the oil industry over farmers ? That will be for the voters to decide if they agree with that concept ... but all Republicans are not the same.

In Minnesota’s First District Republican primary voters will be the first to weigh in. State Senator Dick Day recognizes the huge economic benefit for southern Minnesota stating If there’s any place in the U.S. that the Farm Bill is going to pump money into our economy, it’s the 1st District in Minnesota.”. Conversely, growers will recall Brian Davis’ non-committal support for the Farm Bill during FarmFest while proclaiming strong support for “domestic energy production without government placing too many obstacles in the way in the form of regulations and new taxes, fees or royalties.”

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