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Ethanol 101. "Beware of suspect bedfellows when battling the food crisis!"

By George Naylor and Irene Lin, National Family Farm Coalition  Posted by Linn Cohen-Cole (about the submitter)     Permalink       (Page 1 of 1 pages)
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The question of ethanol and its role in the food crisis is one of the most divisive issues raging in the world today. Factory farm and food processing interests cry out for relief from higher grain prices while in the general population, consumers reeling from rising food costs and environmentalists questioning the benefits of corn ethanol are also raising their concerns. One important question remains unasked in the midst of all this: How low do agribusinesses want corn prices to go? If farm programs had set a price floor adjusted for inflation over the last three decades, many more sustainable family farms would be raising livestock rather than destructive factory farms and the idea of turning valuable food into fuel would seem dubious at best. Since we have no real price floor, corn prices could plummet below cost of production that would ironically then rejuvenate ethanol plants and expand factory farm livestock production while wiping out family farmers.

 

Within NFFC, the subject of ethanol has also provoked division, with some groups wanting an immediate end to all ethanol subsidies and others who believe biofuels offer some promise to our energy crisis. NFFC has an important role to play as one of the few farm organizations willing to question ethanol's benefits for farmers, while making sure our arguments are distinct from anti-ethanol agribusiness interests seeking a return to $2 cheap corn. Agribusiness's other big plan is to dismantle the Conservation Reserve Program, in a futile attempt to have us grow our way out of the food crisis.

In Washington, a major schism has arisen in the big Ag community, with the National Corn Growers Association, American Farm Bureau and pro-ethanol interests battling against their normal partners-in-crime, the Grocery Manufacturers Association and livestock interests like the National Cattlemen Beef Association (NCBA) and the National Pork Producers Council (NPPC). The Bush Administration so far has sided with the pro-ethanol camp, with USDA attributing only 4% of food price increases to the increase in corn prices. Meanwhile, food processors and livestock corporations blame high corn prices and ethanol for shrinking their profits and cite a World Bank economist's estimates that 75% of the food price increase can be blamed on ethanol. The truth probably lies somewhat in between those numbers. Ethanol critics need to be wary before they jump aboard the anti-ethanol campaigns and let off the hook the real bad actors behind our food crisis.

In May 2008, it was revealed in a DC paper that the Grocery Manufacturers of America (GMA) had hired Glover Park Group, a well-connected lobbying firm, to conduct a massive 6-month PR campaign to discredit ethanol and push for eliminating the Renewable Fuel Standards that call for 36 billion gallons of ethanol by 2022 and other ethanol subsidies. GMA members include Cargill, Coca-Cola, ConAgra and many more. The PR campaign would use anti-poverty, environmental and consumers groups to help "ring the alarm about diverting so much of our food to our fuel supplies." GMA, along with the American Meat Institute, Environmental Working Group and National Chicken Council, is also behind the "Food Before Fuel" lobbying campaign that in July 2008 conducted a press conference in Boston, Massachusetts featuring Representative James McGovern, Co-Chair of the House Hunger Caucus, denouncing ethanol mandates as behind the food crisis impacting so many hungry people in the world. Kraft Food also hired former longtime USDA economist Keith Collins to conduct a study showing 25-35% of food price increases were due to ethanol.

Other states are also taking initiative at the behest of agribusiness interests. In June 2008, Texas governor Rick Perry requested that the Environmental Protection Agency grant his state a partial waiver from the RFS mandates. Perry then met privately with EPA Administrator Stephen Johnson in July, prompting an outcry from farm state Senators who fired off a letter to EPA warning them about the consequences of having an undemocratic backroom deal decide such an important policy matter. It was also revealed that Perry flew to DC at the expense of Pilgrim Pride CEO Lonnie Pilgrim. The chicken tycoon also donated $25,000 to Perry's political committee about a month after the waiver request was made and $100,000 to the Republican Governors Association, chaired by Perry. The EPA is now expected to make a decision in August.

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It's clear that those of us farmers who have questioned the viability of ethanol, both as a mechanism for raising commodity prices and helping us wean ourselves off foreign oil, need to be very clear in making our message distinct from the agribusiness interests who are busy coopting hunger and environmental groups. When corn was under $2 and wheat was under $3, we didn't hear much from the Grocery Manufacturers Association about how this was starving farmers and causing massive taxpayer bailouts to sustain the rural economy. When commodity prices collapse again, will the likes of Pilgrim's Pride and Coca-Cola lower the cost of food to reflect this fact?

Already, General Mills (makers of Yoplait yogurt) reported profits up 61% over the previous quarter. National Beef, one of the nation's largest beef processors, reported in July a whopping 429% increase in profits over the same time period in May. Thus, blaming higher commodity prices as the root of the food crisis means attention is shifted away from the real corporate profiteers making money off millions of hungry people. It is clear we can't count on these anti-ethanol interests to put their millions towards reviving a system of price supports and grain reserves so we could actually have stable markets that ensure people around the world have access to affordable food and ensure farmers can make a living without relying on taxpayer subsidies. 

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issue and far too many important factors are not c... by Mike Folkerth on Saturday, Jul 26, 2008 at 10:11:46 AM
Yes, this is a complex issue and Naylor and Lin... by Linn Cohen-Cole on Saturday, Jul 26, 2008 at 1:04:54 PM
and your comment shows the problems of the issue a... by kenshin on Sunday, Jul 27, 2008 at 12:53:45 PM
Ethanol is but one part of the struggle to remove ... by Hayesml47 on Saturday, Jul 26, 2008 at 10:22:06 AM
There are a lot of forces at play here.  This... by Linn Cohen-Cole on Saturday, Jul 26, 2008 at 1:14:55 PM
The biggest problem with the government getting in... by Hayesml47 on Saturday, Jul 26, 2008 at 7:39:27 PM
small initial inputs have such reiterative effects... by Linn Cohen-Cole on Saturday, Jul 26, 2008 at 10:19:13 PM
If I could bring just one of our former presidents... by Hayesml47 on Sunday, Jul 27, 2008 at 9:10:33 AM
I've been reading how there are now companies ... by Ben Kall on Saturday, Jul 26, 2008 at 1:32:48 PM
Biofuels, no matter where we can obtain them from,... by Hayesml47 on Saturday, Jul 26, 2008 at 9:48:42 PM
what is the most reasonable plan but what is being... by Linn Cohen-Cole on Saturday, Jul 26, 2008 at 10:24:28 PM
We have all kinds of government policies on everyt... by Amanda Lang on Saturday, Jul 26, 2008 at 2:30:34 PM
person and have expectations that others are, but ... by Linn Cohen-Cole on Saturday, Jul 26, 2008 at 10:36:36 PM
A friend of mine told me that his gas mileage went... by Anton Grambihler on Monday, Jul 28, 2008 at 11:23:42 AM