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marksremarks - > Roy Mark Blog -> AlwaysDoneMightygood
AlwaysDoneMightygood

 

ADM and its signature project have never lacked friends in high places, despite a history of price fixing scandals and monopolistic misdeeds. The Andreas family, which has headed up the publicly-traded company for decades, has cultivated bipartisan support through generous donations to both Republicans and Democrats. Since the 2000 election cycle, ADM has given more than $3 million in political contributions, according to the Center for Responsive Politics: $1.2 million to Democrats and $1.85 million to Republicans. These donations may have helped sustain a multitude of government subsidies to ADM, including ethanol tax credits, tariffs against foreign ethanol competitors, and federally mandated ethanol additive standards.

Politicians from the Midwestern Corn Belt are some of the company's staunchest allies. Senators Richard Durbin, Charles Grassley, and Tom Harkin, and Representative Dick Gephardt have consistently supported lavish federal tax subsidies to ethanol producers, for which ADM is the prime beneficiary. All are recipients of political action committee donations from the agribusiness behemoth. The Wall Street Journal has referred to the former South Dakota senator and Senate minority leader as "Archer Daschle Midland," because of his unswerving support for the interests of the company.

ADM's political heft was behind the 54 cent per gallon tariff that the US government has imposed on imports of sugar-cane based ethanol from Brazil, which is cheaper than ADM's corn-based fuel. The tariff dates back to 1980 when the CEO of ADM convinced President Carter to adopt it, according to former ADM lobbyist Joseph Karth. Iowa's Senator Grassley recently stated his intention to block any attempt to remove the tariff on lower-cost Brazilian fuel in the face of rising gas prices, stating that "lifting this tariff would be counter-productive to the widely supported goal of promoting home-grown renewable sources of energy."


Over many decades, the company has been the recipient of government largesse in the form of federal and state corn and ethanol subsidies that have totaled billions of dollars, ADM has been a prime beneficiary of the federal tax credit on ethanol, which the refiner can apply to the tax it pays on corporate income. First implemented in 1978, (Jimmy Carter)the tax credit currently stands at 51 cents per gallon of ethanol sold. The Government Accounting Office estimates the subsidies to the ethanol industry from 1980-2000 at $11 billion. As the biggest ethanol producer in the US, ADM has received the largest portion of the government's generosity.

Then there is the question of how practical it is to replace petroleum with corn-based ethanol. "There are conflicting figures on how much land would be needed to meet all of our petroleum demand from ethanol," says Energy Justice Network's Ewall, "and those range from some portion of what we currently have as available crop land to as much as five times as the amount of crop land in the US."

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posted by marksremarks on Monday, April 21, 2008 at 02:40 PM
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