Date: 1994-08-03
Speaker: DEAN KLECKNER (republican)
Chamber: S

President. American Farm Bureau Federation. Maryland Avenue. Washington. DC. DEAR MR. KLECKNER: I am writing to draw your attention to the seemingly stark contradiction between the American Farm Bureau Federations enthusiastic support for the Environmental Protection Agencys new policy on adding ethanol to gasoline. and your organizations equally enthusiastic support for the socalled "takings" or "property rights" agenda. The substantial threat that an exaggerated version of "takings" presents for the new EPA policy highlights. I respectfully suggest. your organizations shortsightedness in supporting a legislative and judicial agenda on "takings" that threatens to inflict serious harm on the agricultural community. As you are well aware. on June 30. 1994. Administrator Carol Browner announced that nearly onethird of gasoline sold in the most polluted cities in the United States must contain renewable oxygenbearing additives. In practice. these mandated additives will principally be ethanol derived from corn. According to press reports. the American Farm Bureau Federation. whose members obviously produce corn. and the Archer Daniels Midland Co.. which produces at least 60% of the nations ethanol supply. vigorously support the policy. On the other hand.. the petroleum industry equally vigorously opposes the policy. The Environmental Protection Agency has defended the policy in the belief that it will help reduce green house emissions. help the balance of trade. and improve domestic energy security. Some or all of these ostensible benefits have been contested by the American Petroleum Institute and others. including some environmental groups. Whatever the actual public benefits. however. this new policy will result in a potentially enormous transfer of wealth from one sector of the economy to anotherfrom the natural gas industry and its employees to ethanol producers and corn farmers. who will now have an expanded market for their product. According to press reports. the Environmental Protection Agency has estimated that this new policy could boost annual demand for corn by some 250 million bushels. as a result. farmers. who already receive substantial federal subsidies. could receive at least 3250 million in additional annual income. This increased income would naturally contribute to higher agricultural land values. On the other hand. the new policy will tend to reduce sales and jobs in the methanol and natural gas industries. reducing the value of these businesses. In supporting takings legislation. the American Farm Bureau Federation and other supporters of these bills have often argued. generally in the context of wetlands or other environmental regulations. that when the government adopts new policies for public benefit. the public should "compensate" those whose property values are adversely affected by the new policy. Does this mean that the American Farm Bureau Federation would support payment by the American taxpayer . to the natural gas industry to "compensate" these companies for the losses they will suffer as a result of. this new policy? It is interesting to observe how S. 2006. a "takings" bill introduced by Senator Robert Dole of Kansas. would have applied to the development of this new policy. S. 2006 would require federal agencies. before issuing any new "policy" which could result in a taking or diminution of use or value of private property" to prepare a "taking impact analysis." The analysis would include. among other