Science News Online, July 22, 2006: "'The lines between the food economy and the energy economy [are] becoming blurred,' says agricultural economist Lester R. Brown, president of the Earth Policy Institute in Washington, D.C. Last week, his organization issued an economic analysis on the subject.
The analysis found an emerging 'competition between the 800 million people who own automobiles and the 2 billion low-income people, many of whom already spend over half their income on food,' Brown says. Furthermore, he says, 'taxpayers may be subsidizing a rise in their own food prices.'
To encourage the use of alternative fuels, U.S. law subsidizes ethanol production at 51 cents per gallon and production of other so-called biofuels at up to $1 per gallon. Those incentives tempt farmers to sell crops to biofuel distilleries or, if they instead sell to food manufacturers, to demand higher prices than they otherwise would.
One-fifth of corn and almost one sixth of the U.S. grain harvest overall goes toward ethanol production, according to the institute's report. And while the world's production of grain will grow by about 20 million tons this year, 70 percent of the increase could be used to generate ethanol for U.S. automobiles, Brown says."