Testimony of

Mr. Larry Quandt

President, Illinois Farmers Union

Before the

Senate Agriculture Subcommittee on Research,

Nutrition, and General Legislation

Tuesday, April 18, 2000

Springfield, Illinois

Good morning, and thank you for the opportunity to testify before the Subcommittee today. My name is Larry Quandt, and I am President of the Illinois Farmers Union.

Senator Fitzgerald, the members of the Illinois Farmers Union, and the 300,000 family farmers and ranchers which make up the National Farmers Union are grateful for your leadership by introducing S. 2233 in the Senate Committee on Environment and Public Works, a bill that would prohibit the use of, and provide for remediation of water contaminated by MTBE, and provide for grants to study the effects on humans of MTBE.

In our opinion, the ongoing MTBE/Ethanol debate concerns the relative benefits of reformulated gasoline (RFG) and its minimum oxygen requirement, the water contamination problems posed by MTBE in certain areas, and the proper role for renewable ethanol.

The Illinois Farmers Union supports legislation that would ensure the expansion of the ethanol industry, improve farm income, protect the environment, and provide energy security to American consumers. Let me mention the concerns of our producers here in Illinois and across the nation that surround the issue of ethanol use in our nation's fuel supply.

First:

· Farm Income - the three biggest problems in farming today are price, price and price. The devastatingly low price era must be reversed. Supplies of farm commodities exceed demand. Expansion of the ethanol industry will reduce the oversupply by utilizing a greater amount of our domestic corn production.

Secondly:

· Environment - Farmers and ranchers play a key role in improving our environment -from protecting our soil, wildlife, and water through conservation programs to helping provide cleaner burning fuel. Ethanol has and will be a key component in ensuring a better environment. However, the confusion created by MTBE must be addressed first.

Third:

· Energy Security - We have recently been reminded again why the United States must become more self-sufficient in energy production. We rely far too much on imported oil from countries that do not necessarily have our best interests at heart.

Almost everyone in the ethanol industry from the farmers who grow the corn to the companies that process it into ethanol, have the same goal, to expand the industry. The real question is what is the best strategy to achieve that goal.

We support efforts to create a national renewable fuels standard to ensure that whatever happens to the clean air act, there is still a viable, sizable role for ethanol in the future. Relying just on an oxygenate standard seems too risky for an industry that is so vital to our nation's farmers.

We support the creation of a renewable energy security reserve. This strategic reserve should be equal to one year's use of feedstock stored on the farm and used when supplies are tight or prices are too high for ethanol to remain competitive. It would immediately boost corn prices to farmers; remove any doubts about ethanol's reliability during times of short supply; and ensure that the industry can continue to operate even when prices are high.

We support strict anti-backsliding requirements on refiners so that the air quality gains from the RFG program are preserved. Tight limits on aromatics levels in all gasoline must be adopted by Congress to prevent dumping in non-RFG areas.

Expanding the industry is important, but we must make sure that the expansion is sustainable, and that it is accomplished to maximize benefits to farmers in the near and long-term. A renewable fuels standard coupled with a renewable energy security reserve, and strict requirements on backsliding will help us accomplish our goals of improving farm income, protecting the environment, and providing energy self sufficiency to the nation.