To ponder over the weekend: What to do about corn and biofuels

Think about this over the weekend.

Among the other consequences of the current drought—along with the ruin of this year’s corn crop—is a complicated political battle over who gets the corn.

The players:

• Corn producers: Want high prices.  Don’t care whether meat or ethanol producers get the corn.  Note: Many own their own ethanol refineries.
• Meat producers: Want the corn at low prices.  Do not want corn grown for ethanol.  Want the ethanol quota waived.
• Ethanol producers: Want the corn at low prices.  Want to keep the quota.
• International aid agencies: Want corn to be grown for food and feed, not fuel.  Want the ethanol quota waived.

The ethanol quota:

• Government energy policy requires an increasing percentage of gasoline to contain ethanol each year.
• More than 40% of U.S. corn is grown for ethanol.

Three big industries—corn agribusiness, industrial meat, ethanol—plus international agencies have a stake in the U.S. corn crop.

How should the Obama administration handle this?

• Waive the ethanol quota?
• Keep the ethanol quota?
• Do nothing?
• Do something else?  If so, what?