The downturn in the ethanol industry is no longer limited to the Midwest. The Syracuse NY Post-Standard editorial board wrote this weekend about a NY state ethanol refinery declaring Chapter 11, and the ethanol industry's attempts to secure more federal assistance.

Just in 2007, the corn-based ethanol industry received nearly twice as much in subsidies and three times as much in tax breaks as solar, wind, geothermal and other renewable energy producers.

The diversion of so much corn to ethanol production helped push food prices up worldwide, worsening food shortages in many countries and contributing to global hunger. Ironically, this also hurt the ethanol plants, which had to pay higher prices for their main ingredient.

When the price of ethanol plummeted with gasoline and credit tightened, many ethanol companies went under. About 9 percent of all ethanol plants in the United States have filed for bankruptcy, and some say that could soon exceed 20 percent.

Now, the industry is asking for a federal bailout. The answer should be no.

Read the whole piece here.

From today's release:

WASHINGTON, January 23, 2009 - Minority farmers have long suffered discrimination at the hands of the U.S. Department of Agriculture, often in the form of grossly inequitable farm loan and commodity support payments. In addition, USDA employees actively and illegally lobbied against civil rights settlement provisions in the recent House passed version of the farm bill.

The potentially criminal activities by USDA employees prompted then-Senator Obama to urge swift resolution to the racial discrimination rampant within USDA. No clear answers have yet emerged as to who was behind the unlawful lobbying and what actions, if any, were taken to punish those involved.

The National Black Farmers Association and Environmental Working Group have published a series of exclusive investigations detailing USDA's discriminatory practices. Obstruction of Justice, published in July 2004, found that nearly nine of 10 African American farmers who sought restitution under a 1999 settlement in the landmark Pigford v. Glickman civil rights case were denied compensation. The study found that the USDA spent 56,000 hours and $12 million contesting individual farmer claims for compensation under the class action lawsuit.

A July 2007 EWG report entitled Short Crop found that black farmers receive between one-sixth to one-third of the major federal crop subsidy benefits received by other farmers and that the "subsidy gap" widened dramatically between 1995 and 2005.

The sorrowful legacy of civil rights abuses at USDA, however, may soon come to an end.

Within days of assuming leadership of USDA, Secretary Thomas Vilsack has indicated that he intends resolve the civil rights issues that have plagued the department for decades.

"We are gratified that Secretary Vilsack has made it his priority to resolve the nagging and hurtful discriminatory practices at USDA that have been inflicted upon thousands of minority farmers," said Dr. John Boyd, president of the NBFA.

""We had an ugly reminder of the racist undercurrent that permeates certain elements at USDA when, within days of passage of the House Farm Bill in 2007, department employees began an illegal lobbying campaign to eliminate a provision that was intended to rectify the disgraceful handling of restitution claims by black farmers' claims under the Pigford discrimination case," said EWG president Ken Cook.

Last week, EWG released the report Ethanol's Federal Subsidy Grab from our Midwest office in Ames, IA. Here's a roundup of some select media reaction to the report:

The Hill - Obama Faces Key Decisions About Ethanol

But Cox said ethanol mandates have led to more corn production, which has further polluted streams and rivers with fertilizer runoff. A better way to spend the money that now goes to support ethanol would be to increase support for solar and wind power to produce electricity, Cox said.

Grist - Straight Talk on Ethanol

This is scandalous. Ethanol subsidies promote the expansion of industrial corn agriculture -- an environmentally ruinous process. Conservation programs try to mitigate industrially ruinous agriculture -- by, say, leaving buffer strips between chemical-drenched corn fields and streams, or taking marginal land out of production.

In other words, ethanol subsidies and conservation programs are directly at odds (strange, given that ethanol is sometimes sold as an "environmental solution.") It's telling that government largess flows more generously to ethanol than to conservation.

Reason - Big Corn Muscles Aside Solar, Wind and Geothermal Subsidies (Via Andrew Sullivan)

The Environmental Working Group has just issued a report that finds that 75 percent of all renewable fuels tax subsidies in 2007 went to environmentally damaging corn-ethanol production. In addition, the corn ethanol industry, teetering on the edge of collapse despite billions already wasted in subsidies on it, now wants additional billions for a bailout.

From today's EWG report release:

WASHINGTON, January 8, 2009 - As Congress and the incoming Obama administration plan the nation's next major investments in green energy, they need to take a hard, clear-eyed look at Department of Energy data documenting corn-based ethanol's stranglehold on federal renewable energy tax credits and subsidies.

An Environmental Working Group (EWG) report released today uses data from a little noticed analysis buried in an April 2008 report from the federal Energy Information Administration (EIA). The information unearthed by EWG shows that solar, wind and other renewable energy sources have struggled to gain significant market share with modest federal support. Meanwhile, corn-based ethanol has accounted for fully three-quarters of the tax benefits and two-thirds of all federal subsidies allotted for renewable energy sources in 2007.

The corn-based ethanol industry received $3 billion in tax credits in 2007, more than four times the $690 million in credits available to companies trying to expand all other forms of renewable energy, including solar, wind and geothermal power.

"With America facing an exploding federal deficit and the crisis of climate change," report author and EWG Midwest Vice President Craig Cox said, "it defies common sense to continue to lavish billions of tax dollars on corn-based ethanol, a fuel that has failed to fulfill its promises at every turn."

"Corn-based ethanol production, spurred by federal subsidies and mandates, is polluting our nation's water, eroding our soil and plowing up precious wildlife habitat -- and worst of all is likely contributing to global warming," Cox said. "As the polluting ethanol industry gets fat at taxpayer expense, proven clean technologies such as solar, wind and geothermal are fighting for support. America needs a truly renewable energy portfolio, and the evidence is mounting that corn-based ethanol will not get us where we need to go."

Go here for the full report.