Yes, it is the typical cooperation of political businessmen and government.
One hand washes the other. Many call it cronyism.
As for liability for the costs of their product, the beauty of it, from the point of view of Con-Agra and Monsanto, and the rest of corn/ethanol lobby, is that they get to hide behind the government's immunity. Hiding behind the government's skirts, they plead "don't blame us, the government made us do it." Or, "we're just offering a product ordered to be used by the government." Never mind that they lobbied for it in the first place.
There are two kinds of businessmen, political and market. The former gets government to mandate the use of their mousetrap, the latter invents a better one. The author Burton Folsom distinguished between "political entrepreneurs and market entrepreneurs."