Texas governor seeks 50% waiver from R.F.S.

by Keith Nunes
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AUSTIN — On April 25, Texas Governor Rick Perry asked the federal government for a 50% waiver from the federal renewable fuel standard (R.F.S.) mandate for ethanol produced from grain in an attempt to get relief from high food costs. Tyson Foods Inc., Springdale, Ark., and Pilgrim’s Pride Corp., Pittsburg, Texas, issued separate statements supporting the effort.

"There are multiple factors contributing to our skyrocketing grocery prices, but a waiver of R.F.S. levels is the best, quickest way to reduce those costs before permanent damage is done," Mr. Perry said.

Corn prices rose 138% globally over the last three years and global food prices increased 83% during the same period. With the implementation of the new R.F.S. mandate, some estimates predict corn prices will rise to $8 bu for the 2008 crop, resulting in a negative impact of $3.59 billion to the state, Mr. Perry said.

"We applaud Governor Perry for his decision to petition the E.P.A. for a partial waiver from the ethanol mandate," said Richard L. Bond, president and chief executive officer of Tyson Foods, Inc. "Something has to be done to address corn-based ethanol’s detrimental impact on food prices and this is a good first step.

"As a major employer in Texas, with more than 10,000 team members, we appreciate Governor Perry’s efforts and hope other states will follow his lead. In addition, we hope Congress will also do the right thing by removing the tariff on imported, sugar-based ethanol and by reducing or eliminating the 51c per gallon federal tax credit for ethanol produced from corn in the U.S."

Lonnie (Bo) Pilgrim, senior chairman of Pilgrim’s Pride, which is based in Texas, echoed Mr. Bond’s support of Mr. Perry’s efforts.

"I am proud to support Governor Perry in his request for a 50% waiver of the renewable fuel standard," he said. "Soaring feed-ingredient costs fueled by the federal government’s ethanol mandate has created a crisis in our industry, the true effects of which are only just now beginning to be felt by consumers in Texas and other states in the form of higher food prices.

"These unprecedented increases for corn and soybean meal are expected to add billions of dollars of cost to our industry this year. We applaud Governor Perry for his leadership on this critical issue and encourage other leaders in the public and private sectors to join in support."

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