Bio Fuels Starving The Poor?

[Texsox]

http://www.foreignaffairs.org/20070501faes...e-the-poor.html

 

 

 

Summary: Thanks to high oil prices and hefty subsidies, corn-based ethanol is now all the rage in the United States. But it takes so much supply to keep ethanol production going that the price of corn -- and those of other food staples -- is shooting up around the world. To stop this trend, and prevent even more people from going hungry, Washington must conserve more and diversify ethanol's production inputs.

 

C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota.

 

There are always consequences that don't appear at first glance and I am always fascinated by them.

[southsider2k5]

It was either Fidel Castro or Hugo Chavez that was quoted as saying something like this was a genocide against poor people. I don't remember where I read that anymore, but it was a month or two ago.

[Texsox]

It was either Fidel Castro or Hugo Chavez that was quoted as saying something like this was a genocide against poor people. I don't remember where I read that anymore, but it was a month or two ago.

 

With the ethanol plants in Iowa needing so much corn, Iowa, IOWA, is about to become a net corn importer. I think the quote above is hyperbole, but it loosly grounded in some facts.

[Balta1701]

The exploding price of corn tortillas has become a major political issue in Mexico.

[Texsox]

The exploding price of corn tortillas has become a major political issue in Mexico.

 

They were state subsidized, have they stopped that?

[Balta1701]

They were state subsidized, have they stopped that?

The subsidies were slightly altered in 1999, first. Last year, the price on them rose 15% or so in Mexico City. The new government recently instituted new price controls on top of the older ones to try to combat the price increase.

[southsider2k5]

The exploding price of corn tortillas has become a major political issue in Mexico.

 

IIRC, that was one of the big issues that set of the protest/revolution in the state in Mexico that has a large Indian population, correct?

[Texsox]

Is the US still offering wheat subsidies to keep bread prices low? I wonder if this is a common issue around the world.

[southsider2k5]

Is the US still offering wheat subsidies to keep bread prices low? I wonder if this is a common issue around the world.

 

The US farmers are among the most heavily subsidized in the world. Its a big issue outside of the US, but no one here wants to look like they are putting farmers out on the street, so nothing has been done about it. Places like Mexico and South America have farmers suffering the same types of problems as our steel workers have been.

[kapkomet]

The US farmers are among the most heavily subsidized in the world. Its a big issue outside of the US, but no one here wants to look like they are putting farmers out on the street, so nothing has been done about it. Places like Mexico and South America have farmers suffering the same types of problems as our steel workers have been.

This is one of the biggest "hangups" on the Doha talks for the WTO right now. If an agreement for Doha is going to be reached, farmers in this country will have to pay the piper.

[Balta1701]

This is one of the biggest "hangups" on the Doha talks for the WTO right now. If an agreement for Doha is going to be reached, farmers in this country will have to pay the piper.

And a huge majority of American taxpayers and consumers will benefit if that ever does happen, IMO.

[Texsox]

I do worry when we are dependent on foreign food to feed ourselves.

[Balta1701]

I do worry when we are dependent on foreign food to feed ourselves.

Well, I worry more about the FDA doing its job and making sure there is some fair inspection process on foreign food entering the country than on the foreign food itself. (Hint; it's not.)

[Texsox]

We worry about foreign oil crippling us, image a lack of food.

[Mplssoxfan]

IIRC, Cane Sugar is the most efficient crop for making ethanol and because of political strength of sugar growers in Florida, we can't get cheap sugar to make ethanol. Furthermore, because of the political strength of ADM, we are using corn to make ethanol, and the price of everything food-related is rising as a result.

 

Corn is more expensive? That's why chicken and beef prices are going through the roof.

 

It's a mess, frankly, and to clean it up, a lot of farmers are going to feel the pinch. Since, politically, that's probably not going to happen, we're stuck.

[NorthSideSox72]

Interesting, but this sort of demand wave shouldn't keep us from moving forward. Its a natural progression. Demand creates an increase in prices, then the increase in prices will result in an increase in supply. This will occur over time. How you ask? For one thing, many people who have land in states like Iowa and Missouri own the land and get paid by our government to NOT plant corn. Its a price prop. Remove the prop, and people will sell the land or use it. The flexibility is there in the market, and if the prices rise enough to overcome the non-planting money, then it will happen on its own.

[Balta1701]

Interesting, but this sort of demand wave shouldn't keep us from moving forward. Its a natural progression. Demand creates an increase in prices, then the increase in prices will result in an increase in supply. This will occur over time. How you ask? For one thing, many people who have land in states like Iowa and Missouri own the land and get paid by our government to NOT plant corn. Its a price prop. Remove the prop, and people will sell the land or use it. The flexibility is there in the market, and if the prices rise enough to overcome the non-planting money, then it will happen on its own.

Long term though, there is still another major issue; is there actually enough arable land to produce the supplies energy consumption will demand as oil prices keep going up? If more and more food supplies keep being required for energy, then it's quite possible that the market won't be able to keep up with the demand.

[StrangeSox]

Long term though, there is still another major issue; is there actually enough arable land to produce the supplies energy consumption will demand as oil prices keep going up? If more and more food supplies keep being required for energy, then it's quite possible that the market won't be able to keep up with the demand.

 

I've heard that a majority of the Midwest would have to convert to growing ethanol corn to meet the targets Bush set last year.

[knightni]

4 words.

 

High Fructose Corn Syrup

 

 

http://www.believermag.com/issues/200310/?read=article_dean

[NorthSideSox72]

Long term though, there is still another major issue; is there actually enough arable land to produce the supplies energy consumption will demand as oil prices keep going up? If more and more food supplies keep being required for energy, then it's quite possible that the market won't be able to keep up with the demand.

That's where tech advancements are necessary, and corn of course is not the ideal fuel. I didn't mention this in the first post, but someone else did - there are far better fuel grains than corn. Corn ethanol should be a stepping stone, not the solution. More energy production from the grain in use means less grain needed.

[Texsox]

Anyone know the waste products from corn ethanol production and what is done with them? For example, used cooking oils are used for animal feed, but is also being used for bio-diesel. That has caused some increases in prices also. Even with all our waste in this country, we have been pretty efficient in finding industrial uses for waste products. Sadly, most find their way into the food chain.

[Cknolls]

And a huge majority of American taxpayers and consumers will benefit if that ever does happen, IMO.

 

Then you can bet your bottom dollar that it won't occur.

[southsideirish]

QUOTE(Texsox @ May 2, 2007 -> 11:00 AM) <{POST_SNAPBACK}>

http://www.foreignaffairs.org/20070501faes...e-the-poor.html

 

 

 

 

 

There are always consequences that don't appear at first glance and I am always fascinated by them.

Start paying people to grow corn instead of paying them NOT to grow corn. More corn and everyone is happy.

[Texsox]

Start paying people to grow corn instead of paying them NOT to grow corn. More corn and everyone is happy.

 

And that would be right in line with why we were paying them to not grow corn. It kept the land available and protected wildlife, stopped another dust bowl, etc. I think the government should declare eminent domain on anyone who refuses to plant.