Coalition Calls for End to Ethanol Subsidie

Groups say ethanol to blame for high food prices.

Published on: Nov 18, 2008

A large coalition made up of environmental groups, food industry organizations and hunger advocacy groups held a press conference in Washington D.C. calling for the government to end all ethanol subsidies. Many of the members of the coalition were supporters of an attempt to repeal the Renewable Fuels Standard earlier this year. They contend that ethanol subsidies are the cause of higher food price.

National Corn Growers President Bob Dickey says this is simply not true.

"These same ethanol critics are the ones who virtually promised to reduce food prices immediately, and have failed to do so, even though corn prices and energy prices are down by more than half in the last few weeks," Dickey says. "Food prices remain at a new high."

Since June, when corn reached a high of $7.88, the price has come down to $3.85 as of Monday, Nov. 17, 2008. Similarly gasoline prices have dropped more than 50% since July when the national average gasoline price was $4.11.

Dickey says the serious drop in corn prices shows there is little connection between expanding ethanol production and raising food prices and increasing domestic energy production will only help our nation’s economy.

As for food prices remaining high, Senator Charles Grassley, R-Iowa, has pointed the finger to the processing industry.

"While food processors were willing and able to immediately blame ethanol and rising com prices for having to increase retail food prices, they won't be extending the same courtesy by lowering those prices with lower com and oil prices," Grassley said.