Ethanol Driving Sharp Rise In Food Prices


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The price of food globally rose 10 percent in 2006 as a result of the demand for corn as a source for ethanol according to a study by the International Monetary Fund.

Ethanol blended gasoline is now mandated in the U.S. It is believed that adding ethanol to gas reduces some of the more harmful emissions and will hopefully reduce smog. It does not, however, reduce greenhouse gas emissions.

The ethanol mandate is far more likely to be a matter of mid-west influence on the political process more than anything else. You have to be pro-ethanol to win the Iowa caucus. It would be nice to have a politician or two be pro-consumer. A 10% rise in food prices hits the poorest amongst us.

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