Food and Fuel Duke It Out

The recent boom in the ethanol market has contributed to a drastic jump in the price of corn, The New York Times’ editorial page points out (registration required)—and that means everyone is going to feel the pinch. As the writers explain,

It’s tempting to assume that the effect of sharply higher prices is confined primarily to the agricultural sector. But where corn is concerned, we are all part of the agricultural sector. The historical cheapness of corn has driven it into nearly every aspect of our economy, in the form, most familiarly, of corn syrup. The low price of corn over the past half-century lies at the very foundation of America’s historically (and unrealistically) low food prices.

The growing demand for ethanol means that the nation is now trying to gratify its “two major appetites” (“cheap food and cheap gas”) with just one crop. Finding new sources of ethanol will take a while, the authors write, so the only solution for now is to reduce those appetites.

Telling people they should be paying more for chow is probably good advice from an environmental standpoint, but not exactly palatable to many consumers or to the food industry. That may be why the online trade mag FoodNavigator takes a different approach to the food-versus-fuel problem, arguing that the impending ethanol-feedstock shortage is “good news for developing nations in the south, who will be able to find new markets for products such as sugar cane and palm oil.” In addition, FoodNav’s editor says,

Agriculture has always adapted to the changing needs of humans, and there is no reason why this shouldn’t be true now…. Perhaps legislative action is needed to reduce the immediate cost pressures on the food industry…. But the point is that if agriculture has the potential to provide both our energy and nutrition needs, then we must face this opportunity positively. We need to review agriculture’s role in the 21st century. We need to assess how significant developments in seed technology, agricultural know-how and supply chain efficiency will help to meet growing global demand.

Wow, and I thought the Times’ advice to “reduce our appetites” sounded vague.

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