Ethanol And Hunger

Investors Business Daily (IBD) ^ | April 11, 2008 | Staff

[La Enchiladita]

Energy: The world's poor are learning what happens when government subsidizes the burning of food. It's time to end this madness and let the market decide if any biofuels make sense.

For most Americans, the rising prices at the supermarket are definitely an annoyance, but hardly a threat to life and health. It's a different story in countries like Haiti, where food inflation has led to real hunger and, last week, to riots.

News reports say the poorest Haitians are trying to get by on cookies made with dirt, vegetable oil and salt. Food riots also have roiled Egypt and led to a general strike in Burkina Faso in West Africa. The high cost of corn, wheat, soybeans and other basics of the world's diet could soon start bringing down governments.

It already has set back the fight to reduce global poverty. World Bank Chairman Robert Zoellick estimates that "the effect of this food crisis on poverty reduction worldwide is on the order of seven lost years."

[gogogodzilla]

I noticed that my VW GTI’s highway gas mileage dropped from roughly 31-32 mpg to 27-28 mpg when ethanol was introduced.

Roughly a 4 mpg dropped in efficiency. But then, it has a turbo-charger, so possibly the fact that ethanol burns cooler is having a beneficial side effect somewhere.

[gogogodzilla]

So world wheat production is a responsibility of US farmers(Overall food volume has went up to feed the world).

Are you telling us that US farmers don't want to sell more food, thus making more money?

[Balding_Eagle]

So, you're saying that it's the government that forces the poor farmer to produce a surplus?

Yeah, I wasn't very clear about that. The Farm Programs are designed in such a way that the farmer, whose natural desire is to produce as large a crop as he can from his farm, will produce more than the US consumer will need.

That happens through several different types of production incentives, such as price floors, storage payments, and extra money if the crop is sold at a certain time during the year. But all this isn't available if the farmer doesn't abide by other restrictions, such as a certain maximum acreage for some crops, or a specified ratio of corn/beans etc.

That normally, the farmer would just plow enough land to feed himself and his family?

I don't know what you mean by 'normally'? Since the 50's we've had huge surpluses. Not sure if that helps.

See my tagline.

[gogogodzilla]

I would think that if there is too much food to sell in the states, the rest would be sold overseas.

That, and I was under the impression that the Federal Government stepped in with agriculture to limit production, as farmers tended to naturally overproduce - which then led to prices being too low for farmers to survive.