“The EPA’s decision to modestly reduce the levels of corn ethanol marks a historic shift in the food versus fuel debate, and is the first, public sign from the government that its artificial quotas, mandated by the RFS, are unrealistic and arbitrary,” NCCR Executive Director Rob Green said. “Although the proposal is a small first step in the right direction, it is really up to Congress to address the unworkable and unfair RFS.”
NCCR is a vocal critic of the government’s ethanol policy, saying it distorts agriculture and commodity markets, artificially inflates the price of corn, and sharply raises food costs and prices for restaurant owners, operators, franchisees, small business owners and the general dining public.
In support of its contention that the ethanol mandate has increased costs, NCCR provided the EPA the results of a PwC study that concluded that the corn ethanol mandate, when fully implemented in 2015, would raise chain restaurant food costs by up to $3.2bn a year every year it remains law.
“In recent years, food commodity costs for chain restaurants and their small business franchisees have increased dramatically,” Green said. “This increase has happened to coincide with the enactment and implementation of the Renewable Fuel Standard.”
In response to concerns about the RFS, the EPA last year – in a policy reversal – proposed to reduce the corn ethanol levels for 2014 to 13.01 billion gallons from 13.8 billion gallons. Food supply chain stakeholders, including NCCR, believe that corn quota is still too high.
“The proposed volumes will continue to provide incentives to overplant corn, which will unfortunately continue the distortions in food commodity costs that have existed since the enactment of the RFS,” Green commented. “Poultry and livestock farmers, food processors and food retailers such as restaurants have borne the brunt of higher food commodity prices caused by the RFS since its enactment."
To unite and organize opposition to the federal corn ethanol mandate, NCCR created a coalition (Feed Food Fairness) of food supply chain partners and launched a public awareness campaign to educate policymakers about the true costs of the RFS mandate.
The National Council of Chain Restaurants, a division of the national Retail Federation, is a trade association exclusively representing chain restaurant companies.
Source: National Retail Federation