Payoff U.S. farmers to end the ethanol tariff

The U.S. imposes a 54-cent-per-gallon tariff on ethanol. This tariff prevents Brazil from selling cheap ethanol in the U.S.

Ideally, the U.S. would repeal the tariff. The tariff benefits U.S. corn farmers, however, and they probably have the political power to block the tariff's repeal.

The U.S. government, I believe, should make a one-time payment to corn farmers in return for repealing the tariff. Tariffs impose a deadweight loss on society and so the harm the tariff creates for U.S. consumers is greater than the benefit that farmers receive from the tariff.

Unfortunately, to raise money to payoff the farmers the government would either have to raise taxes or increase borrowing. Both of these activities create a deadweight loss. But given that the tariff almost completely blocks the importation of ethanol I suspect that overall the U.S. would be richer if it payed off the farmers in return for dropping the tariff. And when you add in national security concerns the case for paying off the farmers becomes even stronger.