Drought crop damage worsens, ethanol waiver urged

Reuters wrote, in part, on August 10:\

WASHINGTON (Reuters)

The worst drought in more than 50 years has caused more damage than expected to corn and soybean crops, the government said on Friday, heightening calls for a suspension of ethanol quotas to head off another global food crisis…experts say food prices appear set to keep rising after a 6 percent jump last month, escalating a food-versus-fuel debate centered on a law that dictates that about 40 percent of the corn crop must be converted into ethanol.

…The governors of two poultry-producing states asked the Obama administration to waive the ethanol requirement, the first formal request for relief… José Graziano da Silva, wrote in the Financial Times that an “immediate, temporary suspension” of the mandate could help head off another world food crisis…Bill Lapp, president of Advanced Economic Solutions, said U.S. food inflation would reach 4.5 percent next year, adding about $30 billion to domestic costs.

Under the five-year-old Renewable Fuel Standard, U.S. fuel companies are required to ensure that 9 percent of their gasoline pools are made up of ethanol this year, which means converting some 40 percent of the corn crop into the biofuel.

A White House spokesman said President Barack Obama was “looking at” the possibility of a waiver together with the Environmental Protection Agency and the USDA.

But with staunch farm belt support and an election looming, many political analysts say the odds of a waiver are low…The USDA numbers highlight the crisis faced by livestock and poultry producers in trying to feed their animals… The U.N.’s Silva said the world food system had not yet reached a crisis point, but reiterated warnings against the kind of export restraints and panic buying that extended the 2008 price surge.”

Chuck Carlson adds: The most telling part, President Obama can fix mandates over night by telling the appointed Secretary of Agriculture to do it or leave office! It does not require an act of congress, but Obama is afraid! This is an old problem long before there was a drought, you can read our 2007 report on it published in Milestones. What was obvious then is now fact!