US to blame for the international food crisis?

[TMA]

Just reading an interesting article in The Economist, which looks at some of the reasons for the sharp increase in food prices worldwide.

It attributes a large portion of the blame to the US government's 'reckless' program of subsidies, aimed at increasing maize production. The maize is largely used to produce ethanol for biofuels, but with the effect of significantly lowering the US's food production over recent years.

I'm just wondering what those in the know make of this - I know this policy of increased biofuel production is not limited to the US alone, but are they particularly to blame on this issue?

[Ginger Yellow]

US to blame for the international food crisis?

There are obviously lots of factors in any economic event (agriculture is heavily dependent on the price of energy, for instance), but everything I've read points to US biofuel production/subsidies as a significant contributing factor to food inflation. Apparently it hasn't been quite so bad in other countries because, for example, sugar cane is much more efficient. That said, even more efficient biofuel production doesn't seem to be the way to deal with climate change. If energy security is your primary aim, then maybe it has a place, but it isn't.

[boris]

US to blame for the international food crisis?

Quite. In fact, if anything, evidence points to biofuel production actually causing damage to the environment that contributes towards climate change, or at least the factors that allegedly cause climate change. In addition, biofuel production also contributes towards increased poverty levels in many instances, as the crops take up land that was formerly used for food production, meaning that food now has to be imported to areas where it used to be grown, causing the increased prices mentioned upthread.

[Gyuri]

US to blame for the international food crisis?

Though the source may be questionable, Zoellick (the World Bank President, ex-US trade rep), has said that the causes are biofuel production mostly, but also droughts in Europe and Australia, and an increase in demand in the developing world (more meals per day; shift to more meat-based diets, which requires much more grain for the livestock).

The ethanol subsidies in the US are known to be disastrous (both in cost and effect), but seem to be a tough political issue here as the competing interests are not equal. The continuation/increase of the subsidies are one of the main political issues in a couple states (and so play a significant role in both congressional and presidential politics), but the costs of the subsidies are spread diffusely among the entire country (and the rest of the world, but that's largely irrelevant for domestic political purposes).

Also, to support Boris's point, the production of ethanol requires more energy than the fuel itself produces.