For years, farmers have sold corn and corn by-products for use in the production of a fuel called ethanol, which is an alternative to gasoline in powering cars and trucks. The firms that produce ethanol, which yields less pollution than gasoline, receive a per-unit subsidy of about 51 cents for each gallon of ethanol that they produce. The Environmental Protection Agency required blending of 11 billion gallons of ethanol with gasoline in 2009, for a subsidy of $5.2 billion.

The U.S. Department of Agriculture’s official estimates that ethanol yields 34 percent more energy than is required to produce the fuel. Some scientists contend that these estimates omit about one-half of the inputs used in corn production. They point out that in drier climates most corn must be irrigated, which depletes underground water reserves and uses natural gas burned to power irrigation pumps. Thus, the production of ethanol at currently subsidized levels may entail more social costs than social benefits.

Who provides the funds used to subsidize the production of ethanol?