Since the last issue of this magazine hit the streets, dramatic scenes of flooding in the Midwest have dominated daily newscasts. Countless homes have been lost or badly damaged and thousands of farmland acres were overwhelmed by floodwaters. Rising food prices, which have already strained the pocketbooks of many Americans, will surely continue to go up in the wake of these floods. Meanwhile, gasoline prices, despite a drop in travel, continue to rise as well.
Because of these and other economic pressures, agricultural, economic and food industry leaders recently urged the U.S. Environmental Protection Agency to reconsider “food-to-fuel” mandates. Texas governor Rick Perry formally asked the EPA to reduce by half a mandate that nine billion gallons of ethanol be blended into the nation's fuel supply this year.
The mandate, referred to as the Renewable Fuel Standard, was created to reduce America's reliance on foreign oil. To do so, large chunks of our corn and soybean crops have been earmarked for government-subsidized ethanol. But this increased demand has pushed the price of corn and soy to historic levels. Those prices have crippled the cattle and poultry industries, which are paying sky-high feed costs. As a result, food costs at restaurants and grocery stores are steadily climbing.
This is a tough issue because never-seen-before gasoline prices and budget-breaking grocery bills are freaking out the public. Something has to give, and the smartest long-term decision appears to be a solution that reduces our reliance on foreign oil. But, according to Dr. Thomas Elam of FarmEcon, a new study finds that food-to-fuel mandates have done little to reduce gas prices.
“It's clear that while America's ethanol mandate has done little to hold down the steadily climbing gasoline prices, its negative effects on the security of our food supply and the cost to feed our families are huge,” says Elam. “In light of recent events [the Midwest flooding], it is imperative that the government re-examine and reduce these mandates.”
The EPA will dissect that study to determine its veracity. It will also examine claims from the Environmental Working Group that if the nine billion gallon ethanol mandate is achieved this year, it will result in an estimated 100 million tons of soil erosion and put 300,000 tons of nitrogen into Midwestern waters.
In light of current conditions, the EPA should consider reducing mandates until it can determine if the ethanol program is in America's best interest right now. A third of the grain crop has been diverted to ethanol, and more will certainly be lost because of the floods.
Many people don't have to drive like they once did. But they have to eat, and soaring food prices may force them to miss meals, particularly the ones they buy from you.