Ethanol Still a Boondoggle
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  • Jonathan Dembo

    I want to draw your attention to one of your stupidest statements, to wit:

    Last year 43 percent of our corn crops went towards producing the biofuel. That shift has driven up global prices for corn, starving the world’s poor and potentially fueling food riots.

    Now, ask yourself this: How could high prices for corn starve the world’s “poor” the vast majority of whom happen to be farmers who produce corn, wheat, rice, or millet or some other grain whose price is tied to corn prices? The answer is: they don’t. If high food prices “starve” anybody it is middle class city dwellers in places like Cairo, a small minority who can afford it, and it “starves” the budgets of military dictatorships that subsidize food for the urban masses who should be starved. And it explains why the rural poor don’t seem to be agitating much in the swirl of coups and counter-coups that are currently roiling the Arab world. High food prices are, in other words, the best thing that could happen to the world’s poor, especially the farmers, and the world thing that could happen to the world’s dictators and subsidizers. It ill behooves you, as a thinker I generally respect, to keep spreading this misinformation.

    • Rick Caird

      Let’s talk basic economics. Corn is a commodity and its price reflects world wide supply and demand. If the US takes a portion of its supply for ethanol, that reduces the worldwide supply, for food, of corn. Hence commodity prices increase. Because of the demand for corn to be used in ethanol, corn prices increase here and worldwide. Further some US farmers switch to growing corn from other grains, reducing the supply of those grains and increasing their costs.

      Now, those increases in costs of basic grains is not a big deal to the US residents because we spend a relatively small amount on our food. But, in countries like Mexico and Egypt, the poor spend a large proportion of their income on food. In those cases, the price increases hurt a lot.

      So, the article is correct on food prices and starvation.

      • Jonathan Dembo

        You missed my point. I was not disagreeing that people would starve in
        the Third World because of higher food prices. I was trying to point
        out that higher food prices would benefit many more millions who produce
        food in the Third World. In fact, higher food prices would benefit the vast majority of people in the Third World who are poor farmers. We may have many good reasons to reduce ethanol subsidies but helping the world’s poor was not, on balance, one of them.
        Lower food prices would benefit the urban poor in the Third World. But
        these are a small minority compared to the poor farmers. Most of the
        urban poor in the Third World are, in fact, farmers forced off their
        lands because of low food prices. Who will buy food from them when the
        US will give it to them at a lower price? By raising the price of corn
        and other grains through ethanol subsidies, we benefit these people.
        The people who benefit from lower grain prices and who who gain by
        eliminating the ethanol subsidies are chiefly urban dwellers, and the
        dictators who use low priced grain to feed the urban poor. None of the
        subsidies go to the rural poor anywhere in Third World. Lower food
        prices are therefore going to hurt the two-thirds of the world’s
        population who produce food.

        • Look up “Broken Window Fallacy” – this isn’t an exact match, but is pretty close. Higher prices hurt more people than they benefit. While some poor people grow corn, most poor people don’t, so the aggregate effect of higher corn prices is a net negative on society.

          • Jonathan Dembo

            Higher prices do not hurt more people than they benefit. They only hurt more people who have a cash income in the first place and most people in the world do not have a cash income. If you have no money the price doesn’t matter. Most poor people in fact do grow corn or a commodity that is a substitute for corn such as wheat or rice or barley or oats. If prices are low for wheat, nobody buys the substitutes or alternatives and their prices fall too. The farmers can’t pay their rent or taxes. They leave the land and move to the cities where the government provides cheap or even free US corn. The lower the price of US corn, the more people leave the land and move to the cities; and vice versa.

  • crocodilechuck

    Who writes this stuff, continued

    1) “Advanced biofuels produced from such sources as sugarcane and algae pass the green test, but they haven’t yet proven their commercial viability.”

    INCORRECT: ethanol from bagasse (cellulose waste from sugarcane processing) industry is viable in Brazil.

    2) “The EU is planning on nearly halving its biofuels targets in the face of studies disproving the energy source’s green credentials. For once, the US should follow Europe’s lead on green energy policy.”

    The ethanol mandate has nothing to do with ‘green policy’. It is a sop to AgriBiz, e.g. ArcherDanielMidland, Cargill, etc

  • Constitution First

    Start with: it costs more to produce alcohol than gasoline, add to that the BTU content is far lower therefore lowers milage, alcohol is prohibited by manufactures of small engines and cars 10 year or older. All the other arguments simply go out the window. Biofuels was a concession to the enviro-terrorists who are bent on destroying this nations industrial foundations. And they are doing a bang-up job of it.

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