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To paraphrase the late, great William F. Buckley, Jr., someone must stand athwart the federal ethanol program yelling, “Stop!” The emergency brake should be pulled – NOW – before ethanol wreaks further havoc.
Poor Haitians rioted last week outside Port-au-Prince’s presidential palace, forcing Prime Minister Jacques Edouard Alexis’ April 12 ouster. Haitians are enduring food prices 40 percent higher than last summer’s. Some have resorted to eating cookies made of salt, vegetable oil, and dirt. That’s right: Dirt cookies.
Developing-world denizens are taking it to the streets with growling stomachs. In Bob Marley’s words, “A hungry man is an angry man.”
Climbing corn prices have ignited Mexican tortilla riots. Enraged citizens in Egypt and Pakistan – potential Muslim powder kegs – also violently have protested premium prices for basic staples. Similar instability has erupted from the Ivory Coast to Indonesia. Resurrecting the defeated “import substitution” model of yore, India and Vietnam are among the nations that lately have prohibited grain exports and imposed government price controls. Kazakhstan, Earth’s No. 5 wheat source, just halted wheat exports, hoping to horde local supplies. One third of the global wheat market is now closed.
High oil prices and growing global food demand fan these flames, but government lit the match. Atop the European Union’s biofuels mandate, America’s 51-cent-per-gallon ethanol tax subsidy (2007 cost: $8 billion) and Congress’ 7.5-billion-gallon annual production quota (rising to 36 billion in 2022) have turned corn farms into monetary printing presses. Diverting one quarter of U.S. corn into motors rather than mouths has boosted prices 74 percent in a year.
Eager to ride the ethanol gravy train, wheat and soybean farmers increasingly switch to corn. Thus, hard wheat is up 86 percent, while soybeans cost 93 percent more. Since April 15, 2007, pricier, grain-based animal feed has helped hike eggs 46 percent. Got milk? You paid 26 percent more. Conversely, meat prices have dropped, as farmers slaughter animals rather than pay so much to feed them.
All this has triggered a race to the top of the grain silo.
On April 9, “the World Bank estimated global food prices have risen 83 percent over the past three years, threatening recent strides in poverty reduction,” the Wall Street Journal noted the next day. “The price of rice, the staple for billions of Asians, is up 147 percent over the past year.”
As ReasonOnline’s Ronald Bailey observed April 8, “the result of these mandates is that about 100 million tons of grain will be transformed this year into fuel … 100 million tons of grain is enough to feed nearly 450 million people for a year.” In short, car engines are burning the crops that feed a half-billion people.
President Bush announced on Monday that the United States would provide $200 million in nutritional aid to poor countries ripped by such unrest. This may feed starving rioters, but it perversely requires that Uncle Sam allocate fresh taxpayer money to scour the mess he created by spending $8 billion in ethanol subsidies.
This is like buying a new hangover cure every morning after closing a new bar every night.
Bad enough if this suffering and strife were ethanol’s ransom for dramatic environmental progress. In fact, ethanol is Earth-hostile. Turning forests into corn fields kills wildlife-friendly, CO2-absorbent trees. Nitrogen-based fertilizers yield nitrous oxide, a greenhouse gas. Irrigating corn strains fresh-water supplies and fills streams with agricultural chemicals.
Congress immediately should abolish federal ethanol subsidies, mandates, and the 54-cent-per-gallon tariff on imports – including Brazil’s cheaper, cleaner, sugar-based ethanol. If scientists can develop ethanol that neither starves people nor rapes the Earth, splendid. However, this enterprise must not rest upon morally repugnant, ecologically counterproductive, economically devastating, government-ordered distortions.
This is all a sop to U.S. grain growers, arguably the most pampered and endlessly entitled people beside Saudi royalty. Since they are hooked on handouts, here’s one more: In exchange for a two-year federal tax holiday on any income they earn, every actual, tractor-driving corn/biofuel farmer should retreat quietly and let America’s experiment in state-sponsored ethanol enter the Unintended Consequences Hall of Fame. Compared to the global chaos that ethanol is fueling, this is a tolerable, one-time investment to pry these farmers’ and their Washington enablers’ hands off of our necks.
(Deroy Murdock is a columnist and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University. E-mail him at deroy.murdock(at)gmail.com)