Food Versus Fuel Fight Heats Up

POINTING TO a global food crisis, international relief organizations last week joined the oil industry, U.S. grocers, and beef, pork, and chicken farmers in seeking elimination of government programs to encourage biofuels, particularly corn-kernel-based ethanol.

Over the past month, the momentum for a rollback of biofuels has grown, sparked by an upsurge in prices of human food and animal feed. It has led the governors of Texas and Connecticut and 24 Republican senators to request that EPA waive or limit the renewable fuel standard (RFS) included in the 2005 and 2007 national energy laws. The RFS calls for 9 billion gal of ethanol to be produced this year, growing to 36 billion gal by 2022, split between corn and cellulosic feedstocks.

The debate unfolded last week during congressional hearings that explored global and national hikes in food prices and whether a doubling of corn prices over the past three years is the culprit. And if so, members of Congress asked, are government ethanol support programs driving the escalation of food prices?

Little clarity emerged, other than a determination that U.S. food prices had increased by an average of 4 to 5% last year and were much higher for some staples, such as eggs and milk. However, U.S. corn acreage is now the highest it has been in 63 years, and corn yields and U.S. exports have also shot up, confounding a simple answer to the cause of high global food prices.

Energy, food, and agriculture experts testifying before Congress pointed to many reasons: global economic growth and new food demands, bad weather, commodity speculation, global energy costs, as well as biofuels. The only factors under Congress' control are biofuel mandates and subsidies, noted some members and ethanol opponents who urged their elimination.

Among those calling for restraint was Rep. John D. Dingell (D-Mich.), chairman of the House Energy & Commerce Committee. He noted that "the ink had hardly dried on the 2007 Energy Act when the clamoring began to alter the RFS." Instead, he said, Congress should wait until EPA finalizes regulations for the RFS, which are required by December.