Leaked food price report pushes ethanol debate

The University has done controversial studies on ethanol in the past, but a World Bank report leaked in early July pressed the debate even further.

The report, leaked to "The Guardian," a British newspaper , said that production of biofuels , such as corn ethanol, have forced global food prices up 75 percent. The United States is the world's top corn exporter , and Minnesota was the nation's fourth-highest corn producer in 2007. More here...

High Oil Prices? Blame Ethanol, OPEC Says

Ethanol is on the ropes because of the food versus fuel debate, but now a new heavyweight just stepped into the ring and this one has got some really big guns.

OPEC president Chakib Khelil has a new culprit for the rising cost of oil–ethanol. Mr. Khelil says about 40% of the recent rise in oil prices can be chalked up to ethanol, which accounts for about 1% of the world’s transportation fuel. The other 60%, apparently, is due to a weak dollar and “geopolitical worries.” The problem: OPEC’s boss doesn’t lay out the logic explaining why ethanol blended into gasoline is to blame for high oil prices. More from the WSJ...

OECD report says massive biofuel subsidies not helping to cut greenhouse gases

BRUSSELS, Belgium: Massive government subsidies for biofuels are not helping to reduce greenhouse gas emissions, according to an OECD report released Wednesday.

The U.S., EU and Canada spent €11 billion (US$17.6 billion) in public money to support energy crops in 2006 — and will more than double that over the next 10 years, according to estimates by the Paris-based Organization for Economic Cooperation and Development. More here...

Wholesale prices soar in June; Sales are sluggish

WASHINGTON (AP) -- The economy showed the depth of its twin problems on Tuesday, slow growth and rising inflation, as the nation wrestled with a teetering financial system, a slumping dollar and rising prices for food and fuel.

The Labor Department reported that soaring costs for gasoline and food pushed inflation at the wholesale level up by a bigger-than-expected 1.8 percent in June, leaving inflation rising over the past year at the fastest pace in more than a quarter-century. More here...

Food prices will continue to rise around the globe

In 1928, Republicans famously promised “a chicken in every pot.” These days, it’s becoming increasingly difficult to promise even an apple for every schoolchild.

And the growing number of poor people around the world will just have to wait in line. More here...

USDA Rule Change May Lead To Crops on Conserved Land

Under pressure from farmers, livestock producers and soaring food prices, the U.S. Department of Agriculture is weighing a policy change that could lead to the plowing of millions of acres of land that had been set aside for conservation.

At issue is the Conservation Reserve Program (CRP), under which the government has paid farmers to stop growing row crops, such as corn and soybeans, on 34 million acres across the country. Designed in the mid-1980s to hold down production and bolster commodity prices, the $1.8 billion-a-year program has turned into a major boon for conservation, with much of the acreage planted with perennial grasses or trees, or restored to wetlands. More here...

Let’s stop subsidising the production and use of bio-fuels

Editorial by Willem Buiter for Financial Times. A recent World Bank report on the causes of the rise in food prices during the past three years confirms the view, widely held outside the Washington DC White House and the French farmers’ lobby, that increased bio-fuel production has made a major contribution to rising food prices. According to Rising Food Prices: Policy Options and World Bank Response, global wheat prices rose by 181 percent over the 3-year period leading up to February 2008 and overall global food prices by 83 percent. Food crop prices are expected to remain high in 2008 and 2009 and then begin to decline. They are likely to remain well above the 2004 levels through 2015 for most food crops. Around 15 percent of the increase in food crop production prices is due directly to higher energy and fertilizer costs.

When will U.S. admit its mistake on ethanol?

From the San Diego Union Tribune. There are few human skills more crucial than being able to recognize a mistake and act to fix it. Whether you're a fifth-grader or a CEO, going into denial when you're mired in failure makes the problem worse.

Unfortunately, we're now witnessing a textbook case of a massive enterprise gone haywire that those responsible abjectly refuse to fix – even as the evidence keeps pouring in to confirm it is a multifaceted disaster. More here...

Biofuel for thought

From Financial Times. You can run a G8 conference on caviar, but not use it as biofuel for your car. One outcome of this week’s meeting of world leaders in Japan should be an end to subsidies for biofuels of uncertain environmental merit but definite harm to some of the world’s poorest people. Subsidising the use of crops as fuel is no substitute for putting a price on carbon emissions. More here.

The Rich World and the Food Crisis

Leaders of the G-8 nations are gathered this week in Toyako, Japan, to root out the culprits in a food crisis that has moved hundreds of millions from subsistence to starvation. They need look no further than an old group photo.

The G-8 countries' interventions have distorted global agricultural markets to the paralysis point. Politicians legislate price supports to enrich farm voters. Lobbies extort tariffs to block cheap food imports and subsidies to underwrite food exports at prices that destroy competitors in poor countries. Conservationists have agitated to set aside productive land and pay farmers not to grow. And now green energy advocates push ethanol quotas and tax credits that divert food into fuel. More here...

Europeans Reconsider Biofuel Goal

BRUSSELS — European officials proposed scaling back drastically on their goal of increasing Europe’s use of biofuels, a major about-face on a central environmental and energy issue.

At the same time, a new report by the British government cast fresh doubt on fuels made from crops as a way to the fight climate change. More here...

Man-Made Hunger

Thirty countries have already seen food riots this year. The ever higher cost of food could push tens of millions of people into abject poverty and starvation.

To a large degree, this crisis is man-made — the result of misguided energy and farm policies. When President Bush and other heads of state of the Group of 8 leading industrial nations meet in Japan this week, they must accept their full share of responsibility and lay out clearly what they will do to address this crisis. More here...

Let’s stop subsidising the production and use of bio-fuels

A recent World Bank report on the causes of the rise in food prices during the past three years confirms the view, widely held outside the Washington DC White House and the French farmers’ lobby, that increased bio-fuel production has made a major contribution to rising food prices. According to Rising Food Prices: Policy Options and World Bank Response, global wheat prices rose by 181 percent over the 3-year period leading up to February 2008 and overall global food prices by 83 percent. Food crop prices are expected to remain high in 2008 and 2009 and then begin to decline. They are likely to remain well above the 2004 levels through 2015 for most food crops. Around 15 percent of the increase in food crop production prices is due directly to higher energy and fertilizer costs. More here...

Heather Draper: Perry picks right side of the ethanol debate

Lately it seems Americans are uttering not one, but two F-words with increasing frequency and emotion.

Food and fuel.

With prices of both soaring, I was glad to see Gov. Rick Perry weigh in on the debate over the federal government’s renewable fuel mandates, which he says are hurting the state’s livestock industries. The rest of the article is here...

Stop requiring ethanol production

From the LA Times... With the price of corn soaring, it's clear that the ethanol mandate is bad economic policy and bad energy policy.

John McCain Interview

ABC News video of a recent John McCain interview.

News Stories...

Weather Risks Cloud Promise of Biofuel

From the New York Times. The record storms and floods that swept through the Midwest last month struck at the heart of America’s corn region, drowning fields and dashing hopes of a bumper crop.

EDITORIAL: Fixing a boondoggle: Pursuing common sense on ethanol

From the Las Vegas Review Journal. On Monday, more than 50 House Republicans asked the Environmental Protection Agency to reduce required ethanol production this year, saying a law requiring a fixed amount of corn liquor be blended into gasoline sold at the pump will boost already high corn prices in the wake of recent Midwestern floods.

Who's Behind High Prices

From The Washington Post. Tired of high gasoline prices and rising food costs? Well, here's a solution. Let's shoot the speculators. A chorus of politicians, including John McCain and Barack Obama, blames these financial slimeballs for piling into commodities markets and pushing prices to artificial and unconscionable levels. Gosh, if only it were that simple. Speculator-bashing is another exercise in scapegoating and grandstanding. Leading politicians either don't understand what's happening or don't want to acknowledge their own complicity.

Food inflation may dodge Midwest flood bullet

DES MOINES, Iowa: Midwest floods may not contribute as much to food inflation as was feared.

Corn prices fell Monday after the government surprised traders, reporting farmers tried to cash in on soaring corn demand for ethanol by planting more acres of the crop than the market expected. The rest of the article is here...