As if sugar tariffs haven’t diverted enough corn from food, ethanol subsidies are adding to the demand, according to the New York Times.
Some highlights from the long article:
Despite continuing doubts about whether the fuel provides a genuine
energy saving, at least 39 new ethanol plants are expected to be
completed over the next 9 to 12 months, projects that will push the
United States past Brazil as the world’s largest ethanol producer.[A]at its current pace of development, could strain food supplies, raise
costs for the livestock industry and force the use of marginal farmland
in the search for ever more acres to plant corn.While it is a renewable, domestically produced fuel that reduces
gasoline pollution, large amounts of oil or natural gas go into making
ethanol from corn, leaving its net contribution to reducing the use of
fossil fuels much in doubt.That the United States is using corn, among the more expensive crops to
grow and harvest, to help meet the country’s fuel needs is a testament
to the politics underlying ethanol’s 30-year rise to prominence.
Brazilian farmers produce ethanol from sugar at a cost roughly 30
percent less.[If corn goes above $3 a bushel] the battleground is likely to shift to some 35 million acres of land
set aside under a 1985 program for conservation and to help prevent
overproduction. Farmers are paid an annual subsidy averaging $48 an
acre not to raise crops on the land.
