Corn is also a key ingredient in the combine of political power and corporate welfare that is U.S. alternative energy policy. The food-to-fuel mandate is known as the Renewable Fuels Standard (RFS) and requires 13.2 billion gallons of ethanol to be blended into the gasoline supply this year and 36 billion gallons by 2022. These quotas are fulfilled almost entirely by corn ethanol. Four of every 10 bushels in 2011 went into the stuff. For the first time ever, more corn is devoted to the fuel than to livestock.
But not to worry, according to the ethanol lobby. On Friday the Renewable Fuels Association trade group put out a statement—apparently serious—claiming that there’s no danger of an ethanol shortage and that “obligated parties under the RFS will have every opportunity to demonstrate compliance this year.”
Even prior to the drought, a growing roll of world leaders was looking on aghast at such special pleading and politely suggesting that maybe the U.S. might do something to avert another wave of food price shocks. The latest is United Nations Food and Agriculture Organization director José Graziano da Silva, who on Friday called for “an immediate, temporary suspension of the mandate” to “give some respite to the market and allow more of the crop to be channelled towards food and feed uses.” It must have been a busy day for the ethanol propagandists.
This is evil. Diverting corn to a “green” fantasy (that even a lot of “green” lobbying outfit are now turning against) is absolutely morally wrong. With the drought and corn yield forecasts tanking, we should be taking steps immediately to halt ethanol production.
US corn producers should – in their own best interest – immediately call for a suspension of corn-based ethanol production. Or they are liable to get caught in a backlash of biblical proportions.
As the article points out, this is a man-made disaster that we can avert – if we can slap a lid on the ethanol lobby.
WSJ link cribbed from Glenn Reynolds.