A United States law over the long term some 50 million metric tons (MT) of US surplus corn into ethanol will create a cleaner environment and a more stable price for US corn farmers but will send world market price soaring, leaving a Filipino livestock raisers benefit with affordable animal feed.

The Philippine Maize Federation Inc. (PFMI) has warned the Department of Agriculture (DA) against overlooking the US regulation which withdraw form the world market all US corn surplus over eight years and thus take out 50 percent of corn supply in the world market.

Roderico R. Bioco, PFMI chairman, said that what used to be a law that applied on only three states including Connecticut and Rhode Island is now a federal law that has presently converted some nine million MT of corn into ethanol.

Bioco said American corn growers represented in the National Corn Growers Association have been pushing for the use of surplus corn into ethanol which ensures that American corn farmers have a stable market for their excess corn output and thus raise corn prices.

"These are very influential, very powerful farmers who are neither for Republicans nor for Democrats, but who vote for those who carry on their agenda. They will be using up all surplus corn for ethanol, although implementation may be slow because it takes time ti build up (ethanol processing) capacity," he said in an interview.

Bioco said the US's Renewable Fuel standard (RFS) which promotes ecological balance allows for ethanol's mixture by 10 percent to replace pollutant gasoline additives that increase octane level in gasoline.

Aside form making use of a cleaner fuel, Bioco said FRS will eventually reduce US crude imports, but will definitely push corn prices up and adversely impact in the Philippine which import one to 1.2 million MT of corn and corn substitutes yearly mainly for animal feed.

"Fifty percent of the world market's corn is supplied by the US. That will create pressure on prices. That's why we have to rely on our own (corn production)," he said.

Bioco lamented that since that liberalization of corn trade in the early 1990s the liberalization law has failed to help corn farmers become competitive despite the creation of the Agricultural Competitiveness Enhancement Fund (ACEF) which should finance sensitive agricultural products' competitiveness program.

"President Ramos said then that the impact of liberalization will be cushioned by the creation of ACEF, but ACEF had not been used of its intended purpose," he said.

Liberalization has no far sent corn tariff at present to 35 percent within the minimum Access Volume (MAV) of some 200,000 MT and 65 percent outside MAV. While tariff earnings form MAV should be used directly to fund farmers' program, the lending rules of ACEF has allowed farmers form other sectors such as the rubber industry to make use of the fund while corn farmers have not availed of a single amount from it, he said.