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US Secretary Of State Admits Biofuels Raises Food Prices

By - Source: Tom's Hardware US | B 3 comments

 

Washington DC - U.S. Secretary of State Condoleezza Rice has admitted that the increased production and use of biofuels has helped raise food prices around the world. In a speech given to a gathering of Peace Corps country directors, Rice said biofuels have caused "some effect" on food prices, but added that it was an "unintended consequence" of government policies.

Rice outlined the main reasons for rising food prices and blamed biofuels for just a small part of the problem. "We think that it is not a large part of the problem, but it in fact may be a part of the problem," she said.

Rice said the inability to distribute food to places like Sudan and the low Dollar exchange rate have contributed the most to higher prices. She also highlighted export controls and the "improving diets" of India and China as contributory factors. Yes, I’m scratching my head on that one too.

Corn prices, along with all other staple foods, have risen dramatically in the past few years - since fall 2006, a bushel of corn has risen from about $2.50 each to approximately $6.51. Almost all of US ethanol is made from corn and an estimated 25% of the entire US crop will be used for ethanol production this year.

The US government mandates that 9 billion gallons of ethanol be added to gasoline this year and that will increase to 15 billion gallons by 2015. Farmers and ethanol production plants receive a 51-cent per gallon tax credit for ethanol production. Interestingly enough some countries, like China, have banned using any food crop for biofuel conversion.

The World Bank agrees with Rice and recently released a report on rising food prices. "Increased bio-fuel production has contributed to the rise in food prices," said the report. You can read the World Bank report here.

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  • 0 Hide
    Hellbound , April 30, 2008 10:05 PM
    Liberals succeed in increasing food prices!!!!
  • 0 Hide
    traviso , May 1, 2008 3:09 PM
    Considering that food distribution still isn't perfect, or perhaps I should say, some parts of the world are so poor, they can't afford to pay the costs to get food surpluses to them, means biofuel will ALWAYS hurt the poor in life threatening ways. As biofuel becomes more popular, people WILL starve to death.

    This is why I'm against biofuel (it's not enviromentally friendly anyways, you're still burning "gas") and all for hybrid, electrical, solar & wind as these solutions don't make people starve and have a lesser effect on the enviroment.

    Biofuel is the snake oil of "saving the environment", it actually hurts it more.
  • 0 Hide
    BeAuMaN , May 5, 2008 4:43 PM
    Meh.... Replace "Biofuel" with "Ethanol". Ethanol is an inefficient use of crops, water, and even energy, with the way that production standards are designed. Horrible tech that should not have been pushed so heavily. Further, that nice 51 cent incentive from the US Fed Govt only applies to Ethanaol and "Biodiesel", iirc... and sadly, Biodiesel is a trademarked name for a specific biofuel, so other brands of biofuels are sort of left out to dry...

    There's other technologies that are quite promising, as I've been working with my father in this industry for quite a while in the California market (On that note, California is a regulatory nightmare). We've had to look at more efficient technologies since California farmers can't afford to waste so many resources being with how there's a lot less to go around here.

    As for Biofuel versus other "cleaner" solutions, good luck getting the whole population to shell out huge amounts of more cash for brand new cars. Biofuels are going to be the bridge to future energy technologies, as they'll allow current engines and motors to run cleaner until all those other technologies do mature and make it to the mass market.