Federally supported ethanol use is one alternative for meeting environmental, energy security, and agricultural objectives. Additional expansion of the industry depends on a continuation of current favorable conditions, including extension of the Federal gasoline tax exemption. Under current conditions, ethanol should be able to compete with other additives as an octane enhancer. Expansion of the ethanol industry would increase ethanol's contribution to improving energy security, reducing air quality problems associated with carbon monoxide, and increasing corn prices. The report provides a basis for assessing the tradeoffs in using ethanol to meet national objectives.
This review prepared for 1985 farm legislation provides an historical overview of U.S. farm policies, an evaluation of the performance of current commodity programs, a description of the general economic setting in which the legislation will operate, and a discussion of possible alternative policy tools and concepts. Particular focus is given to the purpose of commodity programs and an economic assessment of their performance.