Ethanol part of food crisis, says Durbin

Senate Majority Whip Dick Durbin (D-Ill.) said Monday that U.S. ethanol policies may be partly to blame for a global food crisis threatening to leave millions hungry.

Durbin, whose state produced 2.28 billion bushels of corn in 2007 — second only to Iowa — emphasized he wasn’t advocating a shift from policies that provide incentives for biofuel production. At the same time, he said the role biofuels are playing should be explored as part of a coordinated congressional response to massive hunger overseas.

{mosads}“I’ve supported ethanol from the beginning. The object of having homegrown fuel in America is a good goal, and it’s one we’re moving toward ever so slowly,” he said. “But we have to understand it’s had an impact on food prices. Even in the Corn Belt, we’d better be honest about it.”

Agriculture lobbyists say climbing oil and gas prices are more to blame for rising commodity prices. But because of biofuel mandates included in the 2005 energy bill, about one-third of the U.S. corn crop is expected to go toward ethanol production in the coming year.

High corn prices have also contributed to higher soybean and wheat prices. This is because farmers last year planted more corn instead of soybeans and wheat because of the high prices for corn.

The US. Department of Agriculture forecasts an 8 percent decline in planted acreage for corn in 2008, but the National Corn Growers Association said this would still represent the second largest planted acreage of corn since 1949.

If the production of ethanol is contributing to the problem, Durbin said, the U.S. should consider speeding up its planned conversion to cellulosic ethanol, which is made from non-corn sources. The 2005 energy bill mandates the use of biofuels produced from sources such as switchgrasses in later years, but environmental groups question whether the U.S. will have the technological ability to produce biofuels from those materials.  

Durbin chose his words carefully, emphasizing that he was not necessarily advocating a shift away from corn-based ethanol.

“I’ve tried to be very careful in the way I’ve answered and I hope you’ll report it accordingly,” he said. “Don’t draw the conclusion that I’ve called for changing the program, until we take a closer look at it.”

Durbin and Sen. Bob Casey Jr. (D-Pa.) also called on President Bush to increase U.S. food aid from $350 million to $550 million in his 2008 fiscal supplemental budget request. Increased funding to countries such as Sudan, Egypt and Haiti can also lessen the risk of those areas turning into terrorist breeding grounds, Durbin and Casey argued.

Groups that represent U.S. agriculture producers, such as the National Corn Growers Association, say evidence is scarce that food shortages are linked to ethanol production or the federal renewable fuels standards that mandate it.

The American Farm Bureau Federation takes a similar tack. AFBF economist Jim Sartwelle pointed to factors such as foreign markets, severe weather patterns such as a particularly severe drought in Australia and changing dietary habits and preferences as contributing to high food prices.

While there is some evidence that U.S. domestic food price increases can be tied to ethanol, Sartwelle said many commodities that are currently experiencing supply-and-demand stresses aren’t biofuel-related, like rice and wheat. He also emphasized that the impact of U.S. biofuel policies on the rest of the world is grossly exaggerated anyway.

“It’s a pretty small drop in the bucket,” he said. “Weather isn’t policy-driven, and neither are changing food tastes and preferences halfway around the world. These things aren’t caused by U.S. or EU [European Union] policy.”

Apart from supporting initiatives such as the McGovern-Dole food program — which Durbin sponsored in the Senate — and the Second Harvest program, Sartwelle said the Farm Bureau is advocating a minimalist approach to the current crisis because markets have proven they can self-correct.

“These things are pretty cyclical,” he said. “There are ebbs and flows in world grain stocks sometimes, for example, and when those stocks get tight, prices go up.”

Estimates of the link between biofuel production policies and recent food price increases vary. The Washington-based International Food Policy Research Institute says 25 to 33 percent of the inflation is due to biofuel policies, while the United Nations’ Food and Agriculture Organization puts the impact at 10-15 percent.

Some believe the problem could worsen, however, because of the U.S. mandates for ethanol that are set to rise. In 2006, the energy bill called for 4 billion gallons of corn-based ethanol to be mixed into the country’s fuel system, but that mandate jumped to 9 billion gallons this year and nearly 13 billion by 2010.

The result has been a bigger burden on the country’s corn crop. About 20 percent of U.S. corn was used to produce ethanol in 2006, for example, but that percentage could jump to 30 percent this year, according to the Environmental Working Group.