The renewable fuel standard (RFS) is increasing the biofuel-blending requirements. This change can give rise to numerous damaging spillovers throughout the economy, says Marlo Lewis, a senior fellow in environmental policy at the Competitive Enterprise Institute.

This alone will increase corn prices, harming state poultry, beef, pork and dairy farmers who use corn as animal feed. Arkansas’ experience demonstrates the damaging effects the RFS can have on a state economy. According to Arkansas governor Mike Beebe. Virtually all of Arkansas is suffering from severe drought conditions, and accelerating corn prices impose a severe economic impact on the state’s livestock producers. While the drought may have triggered the price spike in corn, the fuel standard aggravates the problem — the policy has boosted corn prices 193 percent since 2005. Agriculture accounts for around 25 percent of the state’s economic activity.