Jon Sanders

Is their solution better for the environment per the standards of manmade-global-warming orthodoxy? No. The most recent studies have shown that, taking into account all the factors involved in producing biofuels, including the need for shipping and for converting land to cropland, they would increase greenhouse gas emissions substantially over the amount contributed by conventional fuels.

What of oil prices? They are still on the increase. Their rise is being eclipsed, however, by the staggering increase in the worldwide price of food. What does the price of food have to do with energy policy? Because our savants' energy is made from food, especially corn, one of the primary staples worldwide.

Corn prices are at all-time highs, having passed $6 a bushel this month after hovering mostly between $2 to $3 the last ten years. This sizeable increase is affecting all kinds of markets worldwide; increasing the prices not only of consumer items and cereals made from corn, but also of beef, chicken and dairy products (livestock that is corn fed), and substitute goods such as grains.

These rapidly increasing prices are affecting not just consumers; they are shutting down businesses and putting people out of work. Last month, for example, 830 people in Siler City, North Carolina, were put out of work when Pilgrim's Pride Corp. closed a chicken-processing plant there because of "soaring feed-ingredient costs resulting from corn-based ethanol production."

In short order, the ethanol solution has brought the phrase "food riot" to the fore, as reporters seek a way to describe events in Burkina Faso, Cameroon, Egypt, Ethiopia, Haiti, Indonesia, Ivory Coast, Madagascar, Mauritania, Pakistan, the Philippines, and Thailand, among others.

Well, at least we won't be subject to a cartel making record profits and keeping supply down, will we? Not so hasty. Corn prices are, as mentioned above, at record high prices. Meanwhile, the U.S. Department of Agriculture is projecting that farmers will plant eight percent fewer acres of corn this year than last.

Record profits, record high prices, suppressed supply, consumers facing higher bills – and you thought oil was bad? This new behemoth is worse for the environment and worse for the poor -- rising food prices hit the poor the hardest, and even "liberals" know that; it's why they often try to exempt food from sales-tax increases.

Only a central-government policy "fix" could be this counterproductive. Everything else is subject to being laughed off by investors, consumers, and people whose fortunes depend upon finding ways to please investors and consumers. Officials insulated from this necessary corrective and equipped with the coercive power of government are doubly able to foist great boondoggles not only on their country, but sometimes even the world.


Jon Sanders

Jon Sanders is associate director of research at the John Locke Foundation in Raleigh, N.C.


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