Ethanol Subsidy: An Engineered Food Monopoly, Part I

Ethanol Subsidy: An Engineered Food Monopoly

Charles E. Carlson

On Dec 23, 2010, our Congress almost secretly and without significant news coverage, voted to continue subsidies to the ethanol and corn industry that gave the indutry a 45-cent per gallon tax credit on every gallon of ethanol-blended gasoline and a 54-cent tariff on foreign ethanol.  The subsidy would have expired a week later.  On Dec 24, The Mexican Government announced it is buying corn futures in the US markets to hedge against a rise in corn prices and to prevent a repeat of the so-called \’tortilla riots\’ of 2007, when tortillas became difficult to afford for many Mexicans.

Political leaders of both US parties have appropriated uncounted billions of dollars to pay to those who destroy food to make ethanol. The rising cost of basic food prices can not be doubted, for literally billions of bushels of corn have been, and will continue to be burned, causing shortages of corn, wheat, soybeans, milk, meat and any other food that can be consumed to replace corn.  Corn is the food of last resort for the very poor, and the main raw material for beef, pork, chicken and even dog food.  America has been known as the land of plenty…plenty of food to share, but no more.  

Agribusiness ethanol giants which include Archer Daniels Midland, whose income is over $40 billion per year, will benefit.  Large farmers are subsidized to raise corn while marketing their remaining food that is made more scarce and expensive in the process.  Congress has created the first nearly foolproof, open-ended, food monopoly.  Corn is the most abundant readily storable and amazingly cheap basic foodstuff ever produced, and it is being wasted in an age when millions of grain eating humans face starvation.  Darfur is only one of many well-publicized examples in central and southern Africa where corn (maize) is a staple and imports are needed.  As the price of commodities go up, the quantity of gifts to the poor, such as United Nations food aid for Gazans, goes down simply because dollars buy less food.

The price of corn has tripled in 10 years to well over six dollars a bushel, and meat and milk are on the rise.  Beef prices are creeping up and cattle are selling at the highest price on record.  Even the price of cotton and sugar and food oil have jumped primarily because farmers switched to raising subsidized corn, ignoring less profitable less subsidized commodities.  The corn-to-alcohol scheme may well be the largest single financial crime of all time in its impact upon the middle class, who pay most of the cost in higher food prices. It will exceed the cost of the escalated oil prices, and if allowed to continue will dwarf the cost of every war, including Vietnam and World Wars II and I.  

The problem of a pending food shortage is not a natural one like drought, tidal wave, or earthquake.  It is man-made for the profit of a few, and for the control of many.  It is based on a preposterous, proven lie–that ethanol is a good fuel to burn in autos.  The ethanol subsidy is a "take from the poor and give to the rich," scheme.  We Hold These Truths has shown that rising food costs and controlled and engineered world famine may well be a planned result of ethanol legislation.  Our conclusions are not based on complex scientific evidence, though such evidence has been available for years.  Common sense and the simple laws of the marketplace are our guides.  Congress, in its sell-out to giant agro-business lobbies, is totally responsible and it will never reverse itself unless absolutely forced to do so.  

In part II we will discuss why ethanol does not benefit the driver and does not save fossil fuels.