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UN: Corn Prices Rising Worldwide As A Result Of US Ethanol Production

Corn crop

According to the director of the United Nations’ Food and Agriculture Organization (FAO), the use of corn in ethanol production in the United States is contributing to the increase in price of corn (otherwise know as maize) around the world.

Director Graziano da Silva has said “FAO has been raising its voice against using food to produce bio energy,” particularly against corn in the U.S., and oilseeds in Europe.

The price of a bushel of corn has nearly tripled from a decade ago on the Chicago Board of Trade, raising from $2.1175 a bushel to $6.115 a bushel (Jan. 2o). Part of corn production in the U.S. is for ethanol that is blended into gasoline.

While biofuel production doesn’t necessarily affect the security of food, research done by the FAO has shown it does have an effect on the cost of food crops. According to Graziano, “We finished a study among the Latin American countries and we found only four countries in the region that could expand biofuel production without affecting food security. Those are Argentina, Brazil, Paraguay, and Colombia. All of them, they have a huge amount of area under extensive pasture that could be converted into very good lands for biofuel use.”

The problem, in the eyes of the FAO, is that food comes first, and if using food for alternative purposes raises food prices, it should not be used.

Do you think this is a smart choice considering world hunger, or do the ends justify the means in the name of cleaning up our fuel sources?

via Bloomberg
Image CC licensed by Stefanie Seskin: Corn crop

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