Renewable Fuel Mandate Expected to Spark Heated Debate12 March 2013
US - A study using data from the US Departments of Commerce, Labour and Agriculture conducted by FarmEcon LLC which looked at food affordability in the United States from 1950 to 2005, when the US introduced its renewable fuel mandate, shows increased ethanol production has coincided with dramatic increases in the cost of food production and decreased food affordability.
The president of FarmEcon LLC anticipates heated debate this spring and summer over the appropriateness of the US Renewable Fuel Mandate.
FarmEcon president Dr Tom Elam reports the cost to the food system of corn, sorghum, barley, oats, distillers dried grains with solubles, hay and wheat increased by 71 billion dollars between 2005 and 2012 coinciding with the increase in the renewable fuel mandate.
Dr Elam said: "First of all, this was not a sponsored study. No one asked me to do it. I did it basically as a public service and food producers have been very interested in it, particularly those most heavily impacted which would be meat, poultry and diary producers who have borne the brunt of these cost increases.
"They have been asking for information and data to support their case that the renewable fuel standard has caused their costs to go up, caused their prices to go up as a result and reduced the affordability of their products.
"There is going to be this spring and summer in the United States a heated debate on the renewable fuel standard and how appropriate it is given the fact that that renewable fuel standard has increased much faster than our ability to increase feedstocks to supply the increased ethanol production that it calls for."
Dr Elam notes, while food become increasingly more affordable from 1950 to 2005, the introduction of the renewable fuel standard reversed that trend.
For more information or to download the study visit FarmEcon.com.
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