Food Prices and Ethanol
A Revolting Situation
If you ask the average American what lay behind the recent revolts in Tunisia and Egypt, you are likely to hear words like freedom, democracy, and even Facebook and Twitter. A word you probably won't hear is food. But just as much as social media, what brought people onto the streets of Tunis and Cairo was food: too little of it at too high a price. It's a problem whose repercussions are being felt all over the world but whose origin, at least in part, lies in our backyards -- or fields.
This past December, the food price index, as measured by the U.N.'s Food & Agriculture Organization, hit an all-time high and shows no sign of coming down. This year, countries are expected to spend more than one trillion dollars on food imports. In the past year, the price of corn has risen fifty-three percent, wheat is up forty-seven percent, and rice is at a two-year high. These increases caused the price of food staples to rise in places like North Africa, where much of the population was already struggling to make ends meet.
This food stress was behind much of the discontent that fueled the revolts in Tunisia and Egypt. In countries where forty percent of the population makes less than two dollars a day, steep rises in food prices can make a difference between eating or not eating.
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Here in the U.S., the rise in food prices isn't that tough for most Americans. Yet the fact is we're playing a role in this unfolding story. At a time when commodity price hikes are threatening to destabilize swaths of the developing world, much of our most productive farmland is dedicated to growing biofuels, especially ethanol.
Now, I know. The last time I brought up ethanol on BreakPoint, I received a lot of angry correspondence. It's the kind of passion I hope we would demonstrate on behalf of human life or the traditional family instead of what, botanically speaking, is a kind of grass.
Passion and anger aside, forty percent of the corn grown in this country goes to ethanol production. That's enough corn to feed 350 million people! And yes, I understand that the kind of corn used in ethanol is not generally used for food. But the land used for growing corn for ethanol could be used to grow corn for food! What's more, all of this diverting potential food for fuel hasn't made much impact in lessening our dependence on foreign oil. And the environmental benefits of using ethanol are at best debatable.
I'm not saying that ethanol and other biofuels are the principal cause of food price hikes. There are other factors at work as well. But in a world that every day adds another 219,000 mouths to be fed, most of them in the most food-stressed areas, growing fuel instead of food is shortsighted, to put it mildly.
So is our subsidizing that shortsightedness. At the same time the food price index was hitting an all-time high, the Senate voted to extend a seven-billion-dollar subsidy to ethanol producers. While the extension is only for one year, it is to "expire" just in time for the Iowa caucuses. You can draw your own conclusions from that timing,
If we can't eliminate or even reduce a subsidy for an activity that benefits the few at the expense of the many, what can we cut? This is the kind of thing that we should all find, well, revolting, if not revolt-worthy.
