Land use for corn for fuel vs food really shouldn't be an issue. Our government is still paying farmers to NOT grow things on their land. Unless the government is just completely out of sync (which is possible), its not like we couldn't keep the price of food down.
That leads us to one of the other benefits of cellulosic ethanol production. Previously corn based ethanol was most cost effective way, but with cellolosic ethanol you can make ethanol out of virtually any biomass.
Gasoline subsidies come in many different forms. Here is an article on it:Gasoline subsidies? You mean special interests tax exemptions similar to mortgage interest deductions or outright handouts like the child tax credit?
Why alternative energy has a hard time: fossil fuels get 250 subsidies