FOOD VS. FUEL

Food vs. Fuel – is the dilemma regarding the risk of diverting farmland or crops for biofuels production in detriment of the food supply on a global scale.

What is the theory? -The “food vs. fuel” or “food or fuel” debate is international in scope, and implies the use of arable farm land to produce biofuel or energy feedstock negatively effects the global food supply and leads to increased costs world wide. their arguments on all sides of this issue. While there is discussion on both sides of this issue, there is an overwhelming amount of evidence, from reports and scientific studies to the testimony of experts in energy and agriculture that states the rising cost of energy is at the root of these problems, not biofuel production.

What are the flaws in the theory? – Starting around January 2007, food price increases occurred seemingly in tandem with advancing corn prices and growth in U.S. ethanol production. The concurrence of these events led to speculation that increased ethanol and biofuel production was a major driving factor in higher corn and feedstock prices, and in turn, higher food prices. While the case can be made that expanded ethanol and biofuel production is a minor factor in increased spending on food, additional food spending increases were more than offset by savings resulting from the inclusion of more biofuel in the U.S. fuel supply.

John M. Urbanchuk Director, LECG LLC – According to his analysis of food, energy and corn prices, “rising energy prices had a more significant impact on food prices than did corn.” In fact, the report notes rising energy prices have twice the impact on the Consumer Price Index (CPI) for food than does the price of corn. LECG LLC Food Price Analysis

Grocery Manufacturers of America – A coalition of industrial food producers and other special interest groups that launched a campaign to discredit the biofuels industry in the eyes of the public and policymakers. The effort, spearheaded by the Grocery Manufacturers Association, and a media campaign proposed by Glover Park Group was made public by U.S. Sen. Chuck Grassley, R-Iowa. The GMA represents more than 300 food, beverage and consumer household goods companies in the United States. Other groups backing the effort included the American Bakers Association, the American Meat Institute, Environmental Working Group, the National Cattlemen’s Beef Association, the National Chicken Council, the National Council of Chain Restaurants, the National Pork Producers Council, and the Snack Food Association, among others.

Six U.S. senators held a press conference in Washington D.C., on May 22 to combat the disinformation campaign: Sens. Grassley; Kit Bond, R-Mo.; Byron Dorgan, D-N.D.; John Thune, R- S.D.; Ben Nelson, D-Neb.; and Ken Salazar, D-Colo. “The Grocery Manufacturers Association has an obvious self-interest in launching this campaign,” Grassley said. “They need to blame someone for high grocery bills, but they’ve aimed their fire at a false target.” Grassley later requested a meeting with 15 chief executive officers of GMA member-companies but subsequently canceled the meeting when only one CEO was willing to defend the group’s actions.

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