It has surprised me over how real little understanding exists among some people in high places over the justification for the 54 cent/gallon ethanol tariff, so it’s not surprising that it’s not common knowledge. The tariff needs to be extended and reauthorized again this year and besides those with a vested interest in undermining the ethanol industry, like big oil, there are some goof-balls with a gross misunderstanding of the tariff, like NY Senator Charles Schumer. The Senator is introducing legislation to repeal the tariff, ostensively to “make more corn available to dairy farmers and reduce milk prices” . . .as though there is some imagined direct connection between the two.
The author of this article does a good job explaining the relationship of the tariff to the subsidy and also the effects of eliminating the tariff.