Food versus fuel

One of the most politically charged decisions the lame-duck Congress will face when it reconvenes is deciding whether to extend subsidies for corn-based ethanol. As rising prices for grain set off alarms among ranchers, consumers and environmentalists, ethanol lobbyists are counting on their generous contributions to key legislators to protect their reserved seats at the governmental feed trough. Several key subsidies — including high tariffs on imports of foreign ethanol and tax credits for ethanol blended into gasoline — are set to expire at the end of December. Congress must decide whether to continue down a track of underwriting food for fuel that resulted in the conversion of 25 percent of the U.S. corn harvest in 2007 to ethanol, a share that experts say will steadily rise in the coming decade along with oil prices. The competing demands on corn inventories — to feed fowl and livestock, fill boxes of packaged cereals on store shelves, and as feedstock for ethanol — have contributed to jumps of 70 percent in the value of corn futures over the past few months. The Environmental Protection Agency's recent decision to raise the maximum allowable ethanol in blended gasoline from 10 percent to 15 percent has prompted warnings of coming meat price increases. J. Patrick Boyle, CEO of the American Meat Institute, told the San Antonio Express-News that American consumers will pay for ethanol in higher price tags on holiday turkeys, hams and other meat products...more