Goodlatte takes on high gas, grocery prices

By Ray Reed

Published: June 10, 2008

AMHERST — The cost of gas and groceries was first on the discussion list when Rep. Bob Goodlatte, R-6th District, held a meeting with constituents at lunchtime Monday.

“Food costs have gone out of sight,” Edgar Kinnier, of Amherst, told Goodlatte. “Is that directly related to some of our federal policies?” Kinnier asked.

“I think it is,” Goodlatte said, as he laid much of the blame for grocery prices on subsidies and mandates for producing ethanol approved by Congress and President Bush.

Goodlatte, former chairman of the House Agriculture Committee, said its current members from the South and Midwest “love having government mandates and subsidies for corn” because it is used for making ethanol.

Goodlatte told the gathering on Monday that he supports mixing ethanol with gas because it burns more efficiently. “So there is a market for this, even without a government mandate,” Goodlatte said.

“But what the mandate says is that corn for ethanol comes ahead of food on people’s tables, feed for livestock and food for export. I don’t think the government should be making that decision,”
Goodlatte said. “I think the marketplace should do that.”

He acknowledged some people say it’s not true that a new policy to triple U.S. production of ethanol is responsible for food prices.

But Goodlatte said there’s a case for his viewpoint.

“I think a significant portion of rising food costs are because it is not just corn that has gone up dramatically in cost. Wheat, soybeans, cotton, rice, peanuts and all the other major commodities have gone up as well” because farmers have shifted out of producing other grains “because of this government-driven demand for ethanol.”

Another participant in the meeting asked whether ethanol has helped keep the price of gas from going even higher.

Goodlatte said the effect of ethanol on gasoline price was hard to pin down, partly because the companies that blend it with gas receive a 51-cents-a-gallon subsidy that’s paid out of people’s tax dollars.

“It may not show up at the gas pump, but it’s coming out of your pocket,” Goodlatte said.

Still, “I do believe ethanol is having an effect” on gas prices, because oil is near $140 a barrel, he said. “But it is such a small percentage of the overall market for gasoline,” he added.