John Cole points out the unintended consequences of the ethanol subsidy on the price of food. I see the upside to rising food prices. Maybe some the dollar hamburgers, bags of chips and 8000 ounce sodas will go away. Don't I hear and see reports on an almost daily basis that we're a bunch of fat slovenly pig boats who need to walk more and eat healthier food in smaller portions? The ethanol industry and its subsidies seem to have been quite the panacea with respect to weaning us off of the cheap processed food so many of us rely on.
I don't like the ethanol subsidy and the obvious pander it is to the voters in the corn growing states. But my distaste is an entirely different argument to the issue at hand. Most Democrats are for the subsidy, and it is difficult to find a Republic from a corn producing (ethanol) state who is against it. It is a convenient way to keep farmers employed. Unfortunately, most of those farmers are corporate agriculture conglomerates.
The charming and informative documentary King Corn covers the effects of the corn subsidy on the food supply. What and how we eat is directly impacted by the corn subsidy. The most profitable corn crop for farmers is yellow dent (a genetic hybrid) that is used to produce High fructose corn syrup. Add the ethanol subsidy and you have what some see as a disastrous impact on the price of food. To my mind this as an opportunity rethink how our food supply is managed. Sustainability should be a top priority.
More on this later.
Friday, July 18, 2008
Is Ethanol Really a Problem?
Subscribe to:
Post Comments (Atom)
1 comment:
I agree with your remarks regarding biofuel subsidies (and let's not forget the mandates and tariff as well), of course.
But may I suggest that your comments on the effects of food prices be more nuanced.
The problem with skyrocketing prices for grains and oilseeds -- staples for poor people living in developing countries -- is that they are not confined to the countries that are diverting crops into biofuels. Agricultural markets are global, and except where countries have attempted to stave off rising prices through (largely fruitless) food-price subsidies and (beggar-thy-neighbor) food export bans, the transmission between world prices and domestic prices has been swift.
In the poorest developing countries, food expenditure as a percentage of household income is typically at least 50%, and reaches 70% in some countries. The people in these countries do not eat highly-processed and highly packaged foods like Corn Flakes, but basic foods like corn meal. If the price of corn doubles, final consumer prices for corn meal increase, not by a few percentage points, as for Corn Flakes, but by at least 50%. If you are living on $1 or $2 per day, even a 10% increase in your food bill hurts, and hurts bad.
The result of sharply rising food prices outside the richer countries of the world has been food riots -- from Haiti to Jakarta -- and hunger. Oxfam reckons that the healthy development of hundreds of millions of children are now at risk.
If your goal is to get people in America to eat prudently and better, you should, rather than promoting policies that raise food prices everywhere in the world, be promoting ones that target Americans specifically.
Post a Comment