The Evils of Ethanol

It is a universal axiom of modern politics that no politician with presidential ambitions can talk honestly about the very real problems of the government's slavish promotion of corn-based ethanol. In the corn belt states, of course, it is impossible to talk honestly about corn-based ethanol if you want to get elected dog catcher.

This why we occasionally need to listen to professors.

In a paper published this month in the journal, Foreign Affairs, two University of Minnesota profs--C. Ford Runge, the Director of the Center for International Food and Agricultural Policy and Benjamin Senauer, the Co-director of the Food Industry Center--highlight some of the unwelcome consequences of growing so much corn for biofuel.

Runge and Senauer cover some familiar territory--the adverse environmental consequences of intensive corn farming, the approximately eight billion dollars of direct subsidies paid to American corn growers each year, the obnoxious enrichment of agri-giant ADM.

But they also take a close look at the effects of U.S. ethanol policy on poor people who live outside the U.S. Long story short: it drives up food costs for those who can least afford it:

In late 2006, the price of tortilla flour in Mexico, which gets 80 percent of its corn imports from the United States, doubled thanks partly to a rise in U.S. corn prices from $2.80 to $4.20 a bushel over the previous several months. (Prices rose even though tortillas are made mainly from Mexican-grown white corn because industrial users of the imported yellow corn, which is used for animal feed and processed foods, started buying the cheaper white variety.) The price surge was exacerbated by speculation and hoarding. With about half of Mexico's 107 million people living in poverty and relying on tortillas as a main source of calories, the public outcry was fierce. In January 2007, Mexico's new president, Felipe Calderón, was forced to cap the prices of corn products.