U.S. Renewable Fuel Mandate Blamed for Growing Global Political Unrest

Farmscape for March 21, 2013

The president of FarmEcon LLC suggests reductions in the affordability of food resulting from increased U.S. ethanol fuel production can be blamed for growing global political unrest.
A FarmEcon study using data from the U.S. Departments of Commerce, Labor and Agriculture which looked at food affordability in the United States from 1950 to 2005, when the U.S. introduced its renewable fuel mandate, shows increased ethanol production has coincided with dramatic increases in the cost of food production and decreased food affordability.
FarmEcon president Dr. Tom Elam says increased commodity costs have been highly correlated with political unrest in less developed countries and we've seen riots and near riots connected to higher food costs.

Clip-Dr. Tom Elam-of FarmEcon LLC:
Basically what you have here is a relatively small group of people in the world, farmers, in particularly grain farmers, who are reaping benefits in the form of higher prices and prices of land at the expense of a much larger population.
It's an extremely regressive policy that we've adopted here in the United States.
By regressive, I mean it has helped some very well off people in a major way and caused a significant amount of economic harm to people across a wide socio economic spectrum but in particular the poorest of the poor in the world have been severely impacted in terms of reduced food affordability as a result of these policies.
It just seems to me that they are grossly unfair to the world population, in particular those in less developed countries who had no voice what so ever in these biofuel mandates that have caused their cost of food to go up.

Dr. Elam anticipates heated debate this spring and summer over the appropriateness of the U.S. Renewable Fuel Mandate.
For more information  visit FarmEcon.com.
For Farmscape.Ca, I'm Bruce Cochrane.

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