06 Dec 2008 Ethanol. Raises food prices. Hurts the environment. Harms the Poor.

The House of Representatives is set to vote today on an energy bill that would require a seven-fold increase in the use of ethanol over the next 15 years.

However, as National Center Senior Fellow Dana Joel Gattuso reports in a study released today, corn prices already have doubled since last year, in large part because Congress is mandating that food be converted to fuel.

Says Dana, in part:

For the past four decades, food prices have remained fairly stable, lagging far behind inflation. But as the USDA reports, food prices this year are soaring, rising twice the rate of inflation – the highest annual increase in over a decade. Corn prices, which doubled since last year, are close to $4 a bushel. Eggs are up 44 percent from last year, while milk, up 21 percent, has jumped to $3.83 a gallon – the highest retail price since World War Two.What’s driving record food prices? Federal policies mandating more food for fuel are a big factor. Requirements that we use more ethanol over oil for energy use are causing us to divert larger amounts of farmland from food to corn-based fuel, contributing to record food costs. In 2000, we were using a modest 6 percent of our cropland for ethanol production. Last year, that share increased to 20 percent; this year, one quarter of our corn harvest is diverted from food to fuel.

Dana also points out that “producing biofuels leaves a huge ecological footprint, exceeding that of fossil fuels.”

Ethanol isn’t so great for low-income Americans, either, who already spend about 40 percent of their budget on food.

Dana adds:

None of this will matter, of course, when Congress acts on the energy bill. As is the way of the world in the nation’s capital, the powerful agribusiness and ethanol interests will trump science, and Congress will turn a blind eye to the poor’s struggle against soaring food prices.

Ethanol. Raises food prices. Hurts the environment. Harms the poor.

Read Dana’s paper here.