Ethanol Fuel Mandates Cause Massive Food and Land Costs, Says New Report

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Washington, D.C.,
October 29, 2008—A new report from the Competitive Enterprise Institute reveals
massive food and land costs stemming from government rules mandating use of
corn ethanol for fuel.

An
initial CEI report released two years ago predicted that the United States did not have enough
cropland to replace gasoline use with corn-based ethanol without dire consequences.
The data since then have proven those findings correct, with radically higher
food prices and a massive loss of forests and grasslands as a result.

“Even
I have been astounded at the swift onset of food shortages and high crop prices
which have ensued since expanding ethanol production,” said CEI Adjunct Scholar
and study author Dennis Avery, in “Biofuels, Food, or Wildlife? The Massive
Land Costs of U.S.
Ethanol.”

According
to the World Bank, global food prices have increased by an average of 83
percent over the 36 months to April 2008, during which time the United States
diverted ever increasing amounts of corn into ethanol. At the same time, European nations were increasingly diverting
rapeseed and imported palm oil into biodiesel, and the Canadian province of Saskatchewan was building plants to ferment
more than 1.4 million tons of wheat per year into wheat ethanol.

The
World Bank’s analysis shows that, from 2004 to 2007, global corn production increased
by 51 million tons, biofuel use in the U.S. increased by 50 million tons, and global
consumption for all other uses increased by 33 million tons—causing global
stocks to decline by 30 million tons. In
other words, biofuels have made the world use more corn than it can sustainably
produce, creating massive food price hikes.

“How
much longer will policy makers continue to pay farmers and rural bankers to
invest in biofuel programs that create food inflation, aggravate fuel costs, and
increase greenhouse gas emissions?” asks Avery. “How many farmers are still buying
land at inflated prices, clearing woodlots and draining wetlands to plant more
corn? Waiting will only make everything worse. The biofuels mandates must be
repealed, and the sooner the better."

Watch the video: “The Simpleton’s Guide to
Ethanol.”

Read more on energy issues at OpenMarket.org and GlobalWarming.org.

CEI is a non-profit, non-partisan
public policy group dedicated to the principles of free enterprise and limited
government. For more information about
CEI, please visit our website at www.cei.org.

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Ethanol Fuel Mandates Cause Massive Food and Land Costs, Says New Report