Thursday, April 12, 2012

Paying to Starve the Poor, part II

I've used this post title before, and I urge you to go read it. Salute to Mark Shea (see his commentary), who brought the following to my attention:

Ethanol Policy Not Producing Desired Results

Some takeaways: Ethanol policy benefit? $24/yr for a family using about 1100 gallons (4164 liters) a year, about 2.2 cents per gallon. Expenses?
[T]he United Nations’ FAO Food Price Index which shows that between Jan. 2007 and Sept. 2011, after adjusting for inflation, corn prices increased by 68 percent, cereals by 69 percent and dairy products by 46 percent.

One study (Hayes et al, 2009) the researchers cite quantifies how a $1 per bushel increase in corn prices impacts a wide variety of food products. The study shows, for example, that between 2005 and 2011 corn prices rose by $5 per bushel, beef rose 18.5 percent, pork 16 percent, poultry 17.5 percent, eggs 27.5 percent, milk 10.5 percent, cheese 9 percent, sugar and sweets 3.5 percent.

The researchers claim that not all these price increases are due to U.S. ethanol policies. However, even “if only one-fourth of this additional expenditure is attributable to ethanol, this would imply a loss to American consumers of $40 billion over the last 4 years.”
In case you're wondering, "cereals" means all grain crops, which make up the primary source of protein for most of the world's poor, who in many cases spend 50% of income (or more) on food. When food prices rise 69%, that means they must now spend 84.5% of income on food to maintain the same food intake. This is usually not a tenable position for them; perforce, they starve.

Is the 0.08% reduction in world greenhouse gas emissions worth it?

No comments: