Bio-Fuel Leading to Food Shortages

A rise in international food prices has provoked fresh criticism of US subsidies for ethanol, which diverts colossal amounts of corn from global food supplies for energy.

Producers of ethanol disagree, saying that the

bio-fuel helps blunt the impact of high imported petroleum prices, but critics say the US policy giving tax breaks for ethanol used in motor fuel ends up being bad for food, energy and the environment.

The subject has produced extraordinary political alliances, with environmental groups and a number of lawmakers from both parties clashing with farm interests and legislators from the corn-producing Midwest states.

C. Ford Runge, a University of Minnesota professor of applied economics and law said: “If you’re taking 40% of the US corn crop, the largest of any country on earth, and putting it to one use, you don’t have to have a PhD in economics to know that’s going to put upward pressure on prices.” In a paper written for Yale University’s Environment 360 online magazine, Runge cites “strong evidence that growing corn, soybeans, and other food crops to produce ethanol takes a heavy toll on the environment and is hurting the world’s poor through higher food prices.”

The UN’s Food and Agriculture Organization has warned that rising food prices are driving unrest around the world, including recent uprisings in the Middle East and North Africa. Indeed, there is no doubt that high food prices – including corn at record highs – are a factor in the unrest, with the countries in question having been subjected to increasing pressure when it comes to household bills.

So the ethanol policy is exacerbating the global food fight and destabilising the MENA region. Is that stupid, or what?

Rod Millington

Chief Editor