The chief financial officer of Cargill, the giant agribusiness conglomerate, says there needs to be "an escape mechanism" built into the Bush administration mandate on renewable fuels, so that the food market is not "distorted." According to the Financial Times
The US is reviewing its federal Renewable Fuel Standard, which calls for the production of 7.5 billion gallons a year of alternative fuels by 2012. This is expected to be reached well ahead of target, and the Bush administration has called for a benchmark of 35 billion gallons by 2017, about half of it from ethanol. Food prices have already been distorted here and abroad
. The inflation has been dearly felt by Mexican consumers, who saw the cost of tortillas jump 50 percent near the start of the year, as corn futures in Chicago soared. The Mexican government has since implemented a price cap and more acres in the country have been planted to corn. Sadly, the increased production has done little to help Mexico's small-scale farmers, who now worry about two opposing scenarios for the global corn market. As Víctor Suárez, spokesman for Anec, an activist group of corn farmers, explains it to reporters for the Guardian
In the first, ... American corn farmers will not be able to keep up with the corn demand and the big Sinaloa producers will step in to the fill the void, leaving Mexicans without tortillas. In the second, the ethanol craze burns itself out, prompting US corn producers to dump their harvests on the Mexican market devastating the small producers.
Ay, ay, ay is right.