Saturday, June 18, 2011

Ethanol Subsidies & World Food Prices

by Richard Crews
In a move not much heralded in the news, the U.S. Senate has just repealed the ethanol agricultural subsidy.

They have, thereby, in a single, simple (though politically unpopular) vote pulled the rug out from under the artificial worldwide food crisis that has loomed--fueled by speculator and tariff fevers--over the past couple of years.

Ethanol subsidies were designed to lessen dependence on fossil fuels and combat global warming. They did neither. But they did divert millions of acres of agricultural land away from food production.

Curious that when Congress gets something right--albeit correcting their own error--it goes largely unnoticed by the media. Perhaps the issue was too complicated for one-liners; or perhaps it just doesn't have the hysterical entertainment appeal of Weinergate.

Note that although the repeal of ethanol subsidies had strong bipartisan support in the Senate, it still faces an uncertain fate in the House. Plus, of course, strong opposition from the powerful corn-farming lobby.