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Food vs. Fuel Still Subject Of Hot Debate

by 5m Editor
9 August 2007, at 10:17am

US - Ethanol consumes a lot of corn. People consume a lot of corn. But is ethanol behind rising food prices?

If 1,800 ethanol producers came to a national conference in St. Paul to be flattered, the editorial cartoons flashed before them must have come as a disappointment. In one, two forlorn children offer sad stares at a table adorned with a box of cornflakes and a carton of milk sitting beside empty bowls. "Since the price of corn has driven up the price of milk so much, you can have cereal or you can have milk, but you can't have both!" says their mother. In another, a motorist at a filling station says he likes ethanol blends because they're cheaper than gasoline. "The money I save lets me splurge and buy a can of corn once a week."

Economist John Urbanchuk, a consultant to the renewable energy and corn industries, showed the stinging artwork to make his point: Ethanol should not be blamed for rising food prices, despite what people read in the newspapers or see on TV.

In his view, the "food vs. fuel" debate, which points to ethanol driving up corn prices, is a phony.

"If you look at the media and the criticisms that are floating around, you're left clearly with the impression that it's all ethanol's fault, and I don't believe that it is," said Urbanchuk, director in the Philadelphia office of LEGC, an economic consulting firm. He was a featured speaker at the American Coalition for Ethanol conference, attended by producers from across the nation.

"I'm not arguing that food prices aren't going up," he said. "They're going up at a rate faster than inflation. To lay the blame solely at the feet of the corn grower or ethanol maker is erroneous."

Source: StarTribune.com

5m Editor