Hey, he’s the President-of-the-World, so, we should listen. WSJ:
America’s political addiction to ethanol has consequences, from raising the price of food to lining the pockets of companies like Archer Daniels Midland. So we’re delighted to see another prominent booster—Bill Clinton—see the fright.
“We have to become energy independent” but “we don’t want to do it at the expense of food riots,” the former President told an agriculture conference Thursday. He urged farmers to consider the needs of developing countries—the implication being that the diversion of corn to ethanol production limits food supplies and artificially raises prices.
No kidding. At the same gathering, Department of Agriculture chief economist Joseph Glauber did the math. Despite a forecasted 4% increase in corn planting, Mr. Glauber expects corn used for ethanol to hit a record five billion bushels in 2011-12, or more than one-third of total U.S. production, thanks to renewable fuel mandates and tax incentives. Corn prices recently hit two-and-a-half-year highs.
That means the forced U.S. ramp-up in ethanol production is commandeering corn that could otherwise go for food and contributing to higher food prices here and in much of the world. Meanwhile, India is seeing protests, China is imposing price controls, and Indonesia is stockpiling rice. Don’t forget the inflationary impact of the Federal Reserve’s easy money policies, which are pushing up prices across the globe more generally.