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What happens when green means taking food out of mouths?

This is a page from the original version of Pagan Vigil. There are some formatting differences. Originally published at

The law of unintended consequences strikes again

Here's an older one, but it is time to remind people again.

Ethanol doesn't work as well as gasoline as a fuel.

Ethanol subsidies have been corn subsidies from the get go,

The technology barely exists to make ethanol from waste plant material, but it is cheaper to make it from subsidized corn so no one refines the technology.

Oh, and U.S. demand for corn is creating food shortages in less developed nations.

Investment in fuel ethanol distilleries in the United States has soared since the late-2005 oil price hikes, but data collection in this fast-changing sector has fallen behind. Because of inadequate data collection on the number of new plants under construction, the quantity of grain that will be needed for fuel ethanol distilleries has been vastly understated.

As a result, farmers, feeders, food processors, ethanol investors, and grain-importing countries are all basing decisions on incomplete data.

The US Department of Agriculture (USDA) projects that distilleries will require only 60 million tons of corn from the 2008 harvest. But here at the Earth Policy Institute (EPI), we estimate that distilleries will need 139 million tons -more than twice as much.

If the EPI estimate is at all close to the mark, the emerging competition between cars and people for grain is likely to drive world grain prices to levels never seen before. The key questions are: How high will grain prices rise? When will the crunch come? And what will be the worldwide effect of rising food prices?

Bet you didn't expect that one.

Here's a rule of thumb.

When government interferes with the free market, expect shortages in direct proportion. There are all sorts of long involved reasons, but it boils down to some very simple ideas. Government can't control the economy, at best it can only divert resources that already exist. Government doesn't produce, it only taxes and regulates. A free market is based only on voluntary exchange. Remember, govern means to slow down.

Posted: Tue - April 17, 2007 at 01:18 PM

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