Friday, April 18, 2008

Ethanol incentives, farm payments may be cut

On Monday we asked
"If the holdup on the renewable energy Investment Tax Credit and Production Tax Credit is the budget, why not revisit the ethanol subsidies?"
Today Reuters is reporting:

Ethanol tax incentives and crop subsidies including "direct" payments to farmers could be reduced as part of the new U.S. farm law, a House chairman and two Senate staff workers said on Thursday.

House Agriculture Committee chairman Collin Peterson told reporters that $1 billion in cuts in commodity programs over 10 years was an element in the House proposal to offset a spending increase of $9.5 billion. Commodity programs include the direct payments of $5.2 billion guaranteed annually to farmers.

Roughly $6 billion of the offsets would come from a new brokerage basis reporting requirement or similar revenue source, said Peterson, Minnesota Democrat. He spoke to reporters after a meeting of senior House and Senate farm-bill negotiators. The brokerage basis reporting rule would require brokers to report the basis under which securities transactions are made, facilitating tax collection....MORE

The money isn't going to the ITC/PTC but it shows a small shift in thinking toward ethanol. Great minds and all that.