US Farmers Urge Obama Administration to Suspend Ethanol Quota Amid Drought
by Suzanne Goldenberg (The Guardian) The Obama administration was urged on Monday to stop diverting grain to gas amid warnings of an “imminent food crisis” caused by America’s drought.
US government forecasts of a 4% rise in food prices for US consumers because of the drought have sharpened criticism of supports for producing fuel from corn-based ethanol.
Meanwhile, research published last week by the New England Complex Systems Institute warned of an “imminent food crisis” because of the diversion of corn stocks to ethanol.
“Necsi has warned for months that misguided food-to-ethanol conversion programs and rampant commodity speculation have created a food price bubble, leading to an inevitable spike in prices by 2013. Now it appears the “crop shock” will arrive even sooner due to drought, unless measures to curb ethanol production and rein in speculators are adopted immediately,” the researchers warned.
In the latest move, the country’s meat, dairy and poultry producers called on the Environmental Protection Agency to suspend this year’s quotas for corn ethanol production.
…Ethanol producers have already reduced production by more than 15% this year, and many refineries across the mid-west have closed because of high corn prices.
The National Corn Growers Association, which supports corn ethanol production, said in a statement that it was “premature” to suspend the incentive. “With the crop still in the field, it is too early to determine this year’s final corn supply,” it said in a statement. READ MORE and MORE (New England Complex Systems Institute) and MORE (National Corn Growers Association) and MORE (Bloomberg) and MORE (Reuters) and MORE (Ethanol Producer Magazine) and MORE (WKZO.com) and MORE (Omaha.com) and MORE (Hooser Ag Today) and MORE (Reuters) and MORE (The Hill/E2Wire) and MORE (CNBC)