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Planet Ark: In Food Vs Fuel Debate, U.S. Resolute On Ethanol

Authors: Timothy Gardner, and Charles Abbott
February 15, 2011


Timothy Gardner and Charles Abbott report that the US will have a harder time forestalling on ethanol usage, even as food prices soar worldwide.

As world food prices reach new highs, a handful of U.S. politicians and hard-hit corporations are readying a fresh effort to forestall the use of more U.S. corn and soybeans as motor fuel.

They are likely doing so in vain, say experts.

Unlike in 2008, when a wave of global panic over grain supplies provoked a fierce "food vs fuel" debate, there's so far only muted outcry over biofuels, even after corn surged last week to within 10 percent of its 2008 peak following a forecast showing even higher use in the ethanol sector.

While that may yet change as higher prices fuel inflation and trigger worries over supply security, officials and experts say ethanol is too ingrained in public policy and the economy of the U.S. heartland to be easily dislodged.

"What would it take for this public policy to be altered- The answer -- a lot," said Gary Blumenthal of World Perspectives, a private consultant.

"The best voices for demanding change are U.S. consumers themselves, but that will require a food price spike larger than the 2 to 3 percent currently forecast by USDA. And since the Fed focuses on core inflation and ignores food and energy, it gets ignored there as well."

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