Corn for Ethanol

I sent the following letter to the Wall Street Journal today in response to a lobbyist's defense of the increased use of corn for ethanol production

Dear Sirs:
In his role as president of the American Corn Growers Association we should expect nothing less from Mr. Bob Dickey than that he make as good a case as possible for increasing the demand for his product. ("Ethanol Has Boosted Corn Output"--Letters--18Sep09) Nevertheless, each of his rationales defending the increased use of corn for ethanol production fails sound economic analysis. The fact that U.S. corn production has increased is to be expected when demand for any good increases. But what other agricultural good was sacrificed in order to increase production from the artificially boosted demand for corn? Mr. Dickey says that the price of corn is down and, therefore, its use as a fuel has not priced other uses out of the market. But the price would have fallen even further without the government's mandate for ethanol production. Finally, no one doubts that the government's mandates for ethanol production is good for farmers, but is it good for everyone else? Of course not. The point of any government intervention is to prevent the free market from guiding production and consumption decisions based upon man's true preferences. If ethanol were such a wonderful product, it would need no government mandates to force us to use it.

Patrick Barron