Number 1, ethanol is a SOLVENT! and a damn good one.
Number 2, Brazil grows 3 crops of sugarcane a year and STILL has to subsidize production.
Number 3, ethanol requires more energy to produce than it yields.
The only reason we use it is because certain vested interests have refused to allow diesel fuel (and biodiesel) to gain widespread acceptance in this country.
Number 1, and it is also a very potent fuel
Number 2, we subsidize every energy source in this nation in one way or another. Even evil coal and nuclear are both penalized and subsidized. It is called buying your elected seat!
Number 3, Only if you honestly believe that the only use for the grain is the ethanol. The production of ethanol from grain has a net gain in energy, and the bi-products have value. Dried Distiller's Grain has a higher food value than raw #2 corn.
As I said earlier, if this nation would have allowed farmers to make money on their crops as food they would not have found a profitable way to market them. When we were raising 100 bu per acre corn we were putting it in piles on the ground and watching large percentages rot away. The farmer was getting $1.00 per bushel on the market, and for the bushels with subsidies they could get as high as $1.35. Today we are raising 75% more, and there are no price payments from the government. However, even with the increased usage and export we still can't build storage fast enough to keep up with the increased production and lose to decay.
Perhaps we need to try a new experiment in this nation: Quit micromanaging everything! Let the market forces work!