Sunday, June 01, 2008

Burning Food

Jerry Bowyer recently wrote a very interesting column called "How Al Gore is Getting Fat Off of a Starving World." Contrary to what the title might indicate, it's not about Gore's latest prodigious weight gain. It's about how people such as Gore are profiting off the high price of foods.

The article goes into a lot of detail, but essentially it's this -- the recent increase in food prices is due to the government's policy to increase ethanol production (" an alternative to fossil fuels, which add carbon to the atmosphere, which causes global warming, which we're all gonna die from, yadda yadda yadda....") Agricultural product prices have risen sharply recently -- feed grain is up 41% in the last year -- and the government has blamed it on, variously, the problems with the weak dollar, higher fuel prices, general inflation....something.

During that same time period, though, fruit and nut prices are down 3%. And all the "reasons" the government gives for the high food prices also apply to these products, yet prices went down.

Coincidentally, different types of agricultural products rose in price as they got closer to the ethanol production process. We turn corn into ethanol, but we don't do the same with walnuts and bananas.

From the column: "It’s not a general inflation problem; it’s a problem of political corruption. America’s first presidential primary happens to be in Iowa. That gives ethanol first dibs at the pork barrel. Add Republican farm voters to Democratic environmentalists, shake vigorously and you get a brew called ethanol. The farmers get rich on taxpayer subsidies, the venture capitalists who focus on alternative fuels (I’m looking in your direction, Mr. Gore) get fat on profits. Good deal for everybody, except people who happen to eat food. "

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