Food & Federal Fuel Follies

Ed Feulner

5/5/2008 2:24:15 PM - Ed Feulner

“What could possibly go wrong?” That’s what members of Congress probably thought when they started shoveling bigger subsidies at ethanol producers. Now, with food riots erupting in some parts of the world, we have our answer: a lot.

Other factors -- a weak dollar, high energy costs, low crop yields in places such as Australia -- have played a role in this crisis. But diverting food to fuel is clearly a contributor, and it exacerbates the situation.

How serious is the problem? According to U.N. Secretary-General Ban Ki-Moon, without emergency intervention “we risk again the specter of widespread hunger, malnutrition and social unrest on an unprecedented scale.” The world needs more food -- especially corn, large amounts of which are being used for fuel.

People, of course, consume corn, and it’s in nearly every processed food we buy. Livestock, too, feed on corn. Some chickens eat 40 pounds of it in a matter of weeks. So a jump in the price drives up prices in just about every aisle of the supermarket. Not surprisingly, the U.N. found that the market prices of cereals, dairy produce, meat, sugar and oils rose 57 percent from March 2007 to March 2008.

There should be enough corn to go around. “Producers plan to plant 86 million acres of corn this year,” the USDA reported in March. “While 7.6 million acres less than 2007, this would still be the second-largest area since 1949.”

But too little of that corn is used as food. A quarter of American corn is turned into ethanol, and that amount is set to rise. Last year the federal government mandated that ethanol production grow five-fold by 2022.

Sensibly, some lawmakers are moving to suspend that law, or even repeal it and the subsidies altogether. We can’t afford to keep burning so much corn while people go hungry.

The food crisis should surprise no one. When 25 percent of a staple crop is taken off the table, shortages result. Just last year, two economics professors predicted the current food shortages.

“By putting pressure on global supplies of edible crops, the surge in ethanol production will translate into higher prices for both processed and staple foods around the world,” C. Ford Runge and Benjamin Senauer wrote in Foreign Affairs. “Biofuels have tied oil and food prices together in ways that could profoundly upset the relationships between food producers, consumers, and nations in the years ahead, with potentially devastating implications for both global poverty and food security.”

Worse, at least one prominent scientist worries that ethanol production could hurt the environment it’s supposed to protect. “Biofuel from corn doesn’t seem very beneficial when you consider its full environmental costs,” according to Dr. William Laurance, a scientist with the Smithsonian Tropical Research Institute.

The $11 billion a year American taxpayers spend to subsidize corn producers “is having some surprising global consequences,” he says. That includes Amazon forests being clear cut so farmers can plant soybeans.

Unfortunately the cornfield isn’t the only place where federal policy is causing troubles. Our country is also experiencing a shortage of wheat -- partly because many wheat farmers have switched to corn, and partly because Washington pays them whether they grow wheat or not.

In 1996 lawmakers passed “legislation allowing wheat growers for the first time to switch to other crops and still collect government subsidies. The result is that farmers received federal wheat payments last year on 15 million acres more than were planted,” The Washington Post recently reported.

Corn is the answer to our food problems, not our fuel problems. The World Bank estimates that the amount of corn needed to fill the gas tank of an SUV is enough to feed one person for an entire year. That’s a tradeoff the world can no longer afford.