Biofuels Like Ethanol Raise Food Costs About 30%

(p. 5) Until January [2008], Keith Collins was the longtime and widely respected chief economist for the Department of Agriculture. In that position, he was a frequent booster of government policies that encouraged biofuel production.
In the months after his departure, he was hired by Kraft Foods Global to analyze the impact of biofuels on food prices. He delivered a stunning, and unexpected, roundhouse to his former employers.
The Bush administration had said biofuels were a minor factor in rising food costs. In a May 1 [2008] press conference, Edward P. Lazear, chairman of the White House Council of Economic Advisers, said, “The bottom line is that we think that ethanol accounts for somewhere between 2 and 3 percent of the overall increase in global food prices.”
A month later, in Rome at a United Nations conference on the food crisis, the agriculture secretary, Ed Schafer, echoed Mr. Lazear’s analysis in defending American biofuels policy.
But Mr. Collins pointed out that the administration’s analysis was more like a back-of-the-envelope calculation, and that it hadn’t accounted for the impact of biofuels on crops other than corn. The push for ethanol has led farmers to grow more corn and less of other food crops, one factor in rising prices for commodities like wheat.
Based on his own analysis, Mr. Collins maintains that biofuels have caused 23 to 35 percent of the increases in food costs.

For the full commentary, see:
ANDREW MARTIN. “THE FEED; The Man Who Dared to Question Ethanol.” The New York Times, SundayBusiness Section (Sun., July 13, 2008): 5.
(Note: bracketed years added.)

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