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Ethanol produced from grain is viewed by many as a way to reduce energy imports, levels of carbon monoxide in the air, and surplus grain stocks. Federal and State governments helped to establish the fuel ethanol industry by providing direct payments, tax exemptions, and loan guarantees. Future policy decisions could significantly affect ethanol production and demand. Treatment of ethanol in agricultural policy is made difficult by its ties to energy, environmental, and trade policy. This bulletin provides a basis for assessing the contribution of ethanol production to national objectives.


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