CBO Ethanol Report Discussed by Agricultural Organizations

Leaders say farmers deserve apology for being blamed for higher food prices.

Published on: Apr 16, 2009

Officials from several agricultural organizations have thoroughly studied a report released last week by the Congressional Budget Office. That report proved that higher energy costs have a greater effect on food prices than the use of renewable ethanol fuel. During a joint press briefing Thursday by several organizations, American Farm Bureau Federation President Bob Stallman said the report came as no surprise.

"We've been saying that ethanol's role in food price increases is minimal," Stallman said. "The report indicates that only 0.5, that's zero-point-five to zero-point-eight percentage points of the 5.1% increase in food prices from April 2007 to April 2008 was as a result of use of corn for ethanol."

There are many other factors impacting the price of food ranging from labor expenses to financial speculation. Stallman says that food prices are still high despite a drop in oil prices and a dramatic decrease in corn prices, and cited a Labor Statistics report that shows the cost of food has increased 4.3% since March of 2008.

Tom Buis, CEO of Growth Energy, also discussed various factors responsible for the increase in food prices and called for investigation into the cause for those increases.

"We feel that Congress should hold hearings and get to the bottom of it," Buis said. "There were several hearings last year that were designed, I think, to blame us for the higher food prices. I would still like to see Congress, those same committees hold hearings and get to the bottom of it."

Roger Johnson, President of the National Farmers Union, agreed that Congressional hearings into the matter would be appropriate.

"We'd love to see the same witnesses that sat in front of the panels about a year ago and blamed farmers for these higher food prices empanelled again," Johnson said. "Ask them why in the face of commodity prices, that have fallen by more than half in many cases from their peak, why food prices haven't gone down along with them, instead of having gone up."

National Corn Growers Association CEO Rick Tolman said opponents of biofuels promote a simplistic message that taking more from the pie for ethanol leaves less for food and feed.

"The reality is that the pie is getting bigger and bigger so bigger so we can do both. It is not a zero-sum game," said Tolman. "Grocery manufacturers and others owe farmers a huge apology for the damage they've done to their reputation among consumers."