US lawmakers have agreed on wide-ranging agricultural legislation that would reduce the federal subsidy on ethanol produced from maize (corn) by 12%. It marks the first move to scale back government support for a biofuel that has been linked to rising food prices and deforestation abroad.
The farm bill, worth nearly $300 billion, would direct federal agricultural policy for the next five years, doling out money for agricultural subsidies, nutrition programmes, conservation projects and international food aid. It would reduce the maize ethanol subsidy from 51 to 45 cents per gallon; critics have called for its complete elimination. The bill also creates new incentives for the development of advanced biofuels that would not compete with food crops.
The bill is expected to clear Congress this week. But the White House says it will veto the bill because it fails to reduce agricultural subsidies at a time when rising crop prices are lining farmers' pockets.