Ethanol policy boosts food costs, study finds

Columbia Tribune (Missouri)
By T.J. GREANEY of the Tribune’s staff
Published Wednesday, June 18, 2008

A new study by the University of Missouri’s Food and Agriculture Policy Research Institute shows that in biofuels, federal policy is the puppet master with power to manipulate the economy with market interventions such as subsidies, tariffs and mandates.

"Federal involvement in agriculture has waxed and waned over the decades, and the nature of the involvement has changed," said Pat Westhoff, co-director of FAPRI. "Most of our basic crop and livestock support measures today have less impact" than in past decades, but "biofuel policies are much more important now than even three years ago."

A new report co-authored by Westhoff and other MU researchers puts biofuel policy on center stage. It predicts that between 2011 and 2017, corn prices will rise 16 percent more than they would in a purely free-market economy without ethanol tariffs or tax credits for ethanol producers.