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Abstract
The U.S. corn ethanol industry is a subsidized, high cost,
trade protected, limited scale industry; unable to compete in
free markets orto efficiently supply new fuel demands of clean
air legislation. Lower cost, sugarcane ethanol from Latin
America (Brazil) should be asupplementary source, especially
for U.S. coastal markets. Counter trade-corn for ethanolwould
be more beneficial to U.S. corn producers than domestic
ethanol corn markets and would result in more efficient land
use, less soil erosion, and less fossil fuel use. A variable
producer subsidy should replace the current market subsidies
and import tax policies, giving limited protection to the domestic
ethanol industry while assuring adequate low-cost ethanol
supplies through competitive imports.