UN urges US to cut ethanol production
In the US, the Financial Times reports that the UN has called for an immediate suspension of government-mandated US ethanol production, putting pressure on the government and Barack Obama to address the food-versus-fuel debate in the run-up to presidential elections. Most US ethanol is made from corn and the UN argues that dispute over ethanol promotion pits states like Iowa that benefit from higher corn prices against livestock-raising states such as Texas that are helped by lower corn prices. But the real cause for alarm could be the impact of higher ethanol prices on European producers still sidelined by cheap US ethanol, who would then increase ethanol production and pricing using typical EU food crops such as wheat and rye.
Responding to calls from IFPRI to dramatically reduce the use of biofuels across the world, the Global Renewable Fuels Alliance released the following statement:
“We don’t yet know how extensive the damage from the drought in the U.S. will be, nor do we know how farmers in the rest of the world will respond to stronger markets for their crops. Biofuels have proven to be an effective way to help lift rural communities worldwide out of poverty. Stronger grain prices have spurred investments in agricultural production that are yielding more crops from the same acre of land. In turn, this is helping traditionally food and energy poor nations become more self-sufficient. Eliminating the market created by biofuels would be a setback to progress made in these areas and could very well increase poverty rates.”
Category: Fuels
