Drought. War. Poverty.
These are leading causes of hunger, according to the United
Nations. Soon we may add another.
Across the globe, people are discovering it's a new contributor
to world hunger. Led by the United States, governments are paying
companies billions to make ethanol from corn and other crops. The
result: these crops are diverted from the food supply, creating
artificial shortages and higher prices.
Even record harvests haven't suppressed food prices. Instead,
prices are soaring to all-time highs.
Corn that traded around $2 a bushel just two years ago is now
well over $5 a bushel. The impact ripples through the food chain of
milk, butter, eggs, flour, pasta and everything else, because dairy
cattle, beef cattle, poultry and swine depend on the corn for their
feed. When chicken feed doesn't cost chicken feed anymore, then
neither does anything else.
Other grains, like wheat, are also at record highs because
farmers are planting less wheat and more corn, thanks to the
ethanol incentives. Less supply, plus more world demand, means
higher prices for wheat products, too, from flour to bread to
Full-scale food riots may arise in some parts of the world, as
more and more grain is diverted into fuel production. The Earth
Policy Institute reports that ethanol-related food protests
occurred last year in Mexico, Italy, Pakistan and Indonesia. A
price-driven stampede killed three and injured 31 at a supermarket
"We are witnessing the beginning of one of the
great tragedies of history," the EPI proclaimed in January. "The
United States, in a misguided effort to reduce its oil insecurity
by converting grain into fuel for cars, is generating global food
insecurity on a scale never seen before."
This problem became five times worse in December when the new
"energy bill" became law. It dictates that Washington will pay a
51-cent-a-gallon subsidy on 36 billion gallons of ethanol each
year, up from the previous 7.5 billion gallon limit. Even before
this incentive expanded, official U.S. Department of Agriculture
reports showed that ethanol was "eating up" 20 percent of the corn
grown in America in 2006 - up from 6 percent in 2000 - a figure
expected to rise in 2008 to 25 percent.
2007 report from International Food Policy Research Institute, or
IFPRI, concludes that "Biofuel production currently adversely
affects the poor through price-level and price-volatility
effects." IFPRI's report also noted, "Since the beginning of
2000, butter and milk prices have tripled, and poultry prices have
president, Lester R. Brown, says, "We're putting the supermarket in
competition with the corner filling station for the output of the
farm. The result is that more people will go hungry."
Purdue University study noted, "This leap in corn prices is leading
to an emerging opposition to ethanol subsidies on the part of
animal agriculture, export markets and other corn users." Those
groups have created a coalition to spotlight the ever-widening
costs of ethanol, including a website at http://www.balancedfoodandfuel.org/.
As oil prices approached $100 per barrel, market incentives for
producing more ethanol increased dramatically. But that wasn't
enough to satisfy the subsidy lobby. Hence they pressed Washington
to decree that we must use five times more ethanol and pay them for
the privilege. That will raise the annual taxpayer-paid subsidy to
over $18 billion per year, even though they're already profitable
thanks to high oil prices. The energy bill converts ethanol
manufacturers' simple profits into super-profits, at taxpayer
expense. Yet somehow they've escaped headlines - and the outrage -
oil profits attract.
Gradually, however, the media are "discovering" that ethanol
subsidies are sending the worldwide cost of food through the
kitchen ceiling. USA Today reported, "
In a bid to reduce oil dependence, many countries are requiring
additional use of biofuels, such as ethanol and biodiesel. That, in
turn, competes with food destined for the table - and increases the
prices of what consumers eat."
Americans won't starve because we have better supplies than the
Third World does. But as the
Christian Science Monitor recently reported, "As usual, it is the
poorest people in the world who suffer most, because food takes up
a bigger share of their daily shopping bill than it does for richer
people." That prompted the United Nations' Food and Agriculture
Organization to issue "warnings about the dangers of turning too
much food into fuel." Their conclusion? "The era of cheap food
Ethanol advocates are also promoting other biofuels whose
cellulose can be used in place of corn. But the "food vs. fuel"
problem isn't solved if farmers remove acreage from corn production
to plant these instead. The ethanol lobby claims that the higher
costs of food are being pushed mostly by the higher costs of
energy. Of course, subsidizing ethanol while suppressing domestic
oil and gas drilling and halting construction of oil refineries and
nuclear power plants is a big reason why energy costs keep
As usual, free enterprise offers the best solution. As The Heritage
Foundation's Ben Lieberman and others have suggested, we should be
repealing the ethanol mandate instead of expanding it.
Taxpayers would save billions that now flow out of the federal
Treasury, plus our food would be more affordable. And the Third
World wouldn't face as many food shortages.
Ending the subsidy is easier said than done, of course. As the
New York Times has noted, the ethanol lobby is now "an entrenched political force." Years of
multi-billion dollar subsidies have turned a small group into a
wealthy and effective lobby on Capitol Hill.
Washington should give an ear to some common sense instead. But
expecting that to happen may be just plain ... corny.
Istook is a distinguished fellow in Government
First appeared in World Net Daily
These are leading causes of hunger, according to the United Nations. Soon we may add another. Ethanol.
Read More >>
Heritage's daily Morning Bell e-mail keeps you updated on the ongoing policy battles in Washington and around the country.
The subscription is free and delivers you the latest conservative policy perspectives on the news each weekday--straight from Heritage experts.
The Morning Bell is your daily wake-up call offering a fresh, conservative analysis of the news.
More than 200,000 Americans rely on Heritage's Morning Bell to stay up to date on the policy battles that affect them.
Rush Limbaugh says "The Heritage Foundation's Morning Bell is just terrific!"
Rep. Peter Roskam(R-IL) says it's "a great way to start the day for any conservative who wants to get America back on track."
Sign up to start your free subscription today!
The Heritage Foundation is the nation’s most broadly supported public policy research institute, with hundreds of thousands of individual, foundation and corporate donors. Heritage, founded in February 1973, has a staff of 275 and an annual expense budget of $82.4 million.
Our mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense. Read More
© 2013, The Heritage Foundation Conservative policy research since 1973