Wesley Clark has two main arguments:

• The building of oil infrastructure was subsidized by government, therefore subsidizing ethanol infrastructure is only fair
• Using government money to install ethanol pumps and mandating that new vehicles be flex-fuel compatible would create an “open market” where ethanol can compete with gasoline

An open market for fuel choice in America would be great. I don’t believe that:

(1) mandating the production of vehicles that are able to run on ethanol

(2) using government money or tax credits to encourage gasoline stations to install E85 pumps

(3) extending the tariff on foreign ethanol

at all constitute an “open” market. Nor does the RFS mandate requiring that over 10 billion gallons of ethanol be blended into the fuel supply each year. Corn ethanol can compete, just not with anything produced abroad, not without a mandate requiring that Americans use it, and not without a tax credit or massive infrastructure investments.

Here is Wesley Clark’s statement in support of extending the tariff:  “There is absolutely no reason for the United States to trade dependence on foreign oil (for) dependence on foreign produced ethanol.”

That statement, along with the letter above, display an amazing ignorance of economics. Apparently international trade is harmful and we should erect more trade barriers to reduce our dependence on anything produced outside of the good ole US of A.

The less obvious point here is that billions and billions of dollars of government investment spent on infrastructure to persuade blenders and gas stations to offer E85 is also not, by any reasonable definition, an “open market.”

Media coverage of the ethanol issue has appeared in The Wall Street Journal, The Washington Post, The Chicago Tribune and The New York Times. Also see Robert Rapier’s blog, Energy Squared.

The two biggest proponents of the extension are the Renewable Fuels Association (RFA) and Growth Energy. They are currently split over their preferred type of government support for the industry. RFA is promoting a 5 year extension of the VEETC (and presumably the tariff) while Growth Energy supports a phasing out of the tax credit with government funding going into developing the infrastructure to promote ethanol sales.

They have been noticeably silent on the issue of whether or not the tariff will be extended. The tariff, $.54/gallon, prevents the Brazilian ethanol industry from competing with ethanol produced in the United States. When prodded, the domestic ethanol producers have successfully muddled the issue over threats of job losses if the tariff expires, while asking why the U.S. should replace its dependence on foreign oil with a dependence on foreign ethanol.

]]> http://www.factsaboutethanol.org/2010/08/10/following-the-ethanol-debate/feed/ http://www.factsaboutethanol.org/2009/01/27/economist-ethanol-exuberance-will-hit-fan/ http://www.factsaboutethanol.org/2009/01/27/economist-ethanol-exuberance-will-hit-fan/#comments Tue, 27 Jan 2009 18:00:46 +0000 GasMan http://factsaboutethanol.org/?p=439 From AgWeek

An Iowa State University agricultural economist who is famous for criticizing the ethanol fuel industry recently made his third appearance in a row at the annual North Dakota Grain Dealers convention. The entertaining economist, Dave Swenson, says he has…

WASHINGTON, January 8, 2009 - As Congress and the incoming Obama administration plan the nation’s next major investments in green energy, they need to take a hard, clear-eyed look at Department of Energy data documenting corn-based ethanol’s stranglehold on federal renewable energy tax credits and subsidies.

An Environmental Working Group (EWG) report released today uses data from a little noticed analysis buried in an April 2008 report from the federal Energy Information Administration (EIA). The information unearthed by EWG shows that solar, wind and other renewable energy sources have struggled to gain significant market share with modest federal support. Meanwhile, corn-based ethanol has accounted for fully three-quarters of the tax benefits and two-thirds of all federal subsidies allotted for renewable energy sources in 2007.

The corn-based ethanol industry received $3 billion in tax credits in 2007, more than four times the $690 million in credits available to companies trying to expand all other forms of renewable energy, including solar, wind and geothermal power.

“With America facing an exploding federal deficit and the crisis of climate change,” report author and EWG Midwest Vice President Craig Cox said, “it defies common sense to continue to lavish billions of tax dollars on corn-based ethanol, a fuel that has failed to fulfill its promises at every turn.”

“Corn-based ethanol production, spurred by federal subsidies and mandates, is polluting our nation’s water, eroding our soil and plowing up precious wildlife habitat — and worst of all is likely contributing to global warming,” Cox said. “As the polluting ethanol industry gets fat at taxpayer expense, proven clean technologies such as solar, wind and geothermal are fighting for support. America needs a truly renewable energy portfolio, and the evidence is mounting that corn-based ethanol will not get us where we need to go.”

Go here for the full report - http://www.ewg.org/node/27498

# # #

EWG is a nonprofit research organization based in Washington, DC that uses the power of information to protect human health and the environment. EWG’s farm subsidy database and reports and analysis on the impact modern agriculture has on the environment can be found at www.mulchblog.com

Like right now, the industry is pushing EPA to sign off on higher blends of ethanol into gasoline. Currently the cap is 10 percent.

Why do they want higher blends approved? Simple. Ethanol is more expensive than gasoline right now.

According to the America Coalition for Ethanol, for December 3, 2008, the average rack price - or wholesale price - of ethanol in Nebraska is $1.81 per gallon. In South Dakota it is $1.80. That is equal to the national average RETAIL price of gasoline released by the US Department of Energy on December 1, 2008.

On the futures markets, … ethanol opened trading today at $1.53/gal, while RBOB Gasoline, the reformulated gasoline with which ethanol is mixed, opened trading today at $1.01/gal.

Unless they get higher blends mandated, … gas prices will remain low.

Establish an oil import reduction goal that strengthens energy security and
independence. Since nearly 90% of oil is used for transportation, propose a plan
that:

• Brings more fuel efficient and near-zero emission vehicles into the market;
• Increases the supply of domestically produced, low-carbon fuels;
• Minimizes the economic and technological uncertainties inherent in
deploying high efficiency vehicles and developing and using nonpetroleum
transportation fuels; and
• Reduces vehicle miles travelled and increases mass movement of people
and goods.

Reasonable people could quibble with fuzzy headed statements like “reduce miles travelled” … and even the dubious concept of “establishing an oil import reduction goal” but all should find great wisdom, for the first time in the past 8 or more years of energy debate, at the measured, reasonble, principled and REALISTIC tone of this energy plan outline.

Indeed, per the 2007 energy act, we are about to embark upon mandated widespread use of cellulosic ethanol in the next 13 months, … and there is still no such fuel commercially available.

Too bad we didn’t have these governors speaking up more loudly back then.

Nov. 6 (Bloomberg) — President-elect Barack Obama plans to support unprofitable U.S. ethanol producers and pursue the same policies that failed George W. Bush.
Obama, the Democratic senator from Illinois, the second- biggest corn-growing state, will maintain Bush’s goal requiring fuel producers use at least 36 billion gallons of biofuels in 2022, said Heather Zichal, the campaign’s senior energy adviser. The ethanol industry, which loses about 66 cents a gallon at current prices, will receive at least as much support as from the current administration, including tax credits to spur consumption, she said.

“Obama recognizes how important the renewable and biofuels industry is to creating jobs and meeting our goal of reducing dependence on foreign oil,” Zichal said in a Nov. 3 interview. “He’s fully committed to it and sees tremendous value in the renewable fuels standard and continuing down this path.”

Ethanol makers are collapsing after wrong-way bets on corn prices overwhelmed $20 billion in federal aid and government- guaranteed demand for the fuel additive. VeraSun Energy Corp., the second-largest producer, filed for Chapter 11 bankruptcy protection on Oct. 31.

Bush’s approach has been criticized for hurting the environment, increasing global food prices and contributing to riots from Haiti to Egypt. Earlier this year, at least 51 members of his own party, led by Texas Governor Rick Perry, called for relaxing the policy.
Distillers struggle to make money because costs to produce ethanol are rising while increasing supplies drive down prices of the fuel. U.S. output climbed to a record 647,000 barrels a day in August, more than double the 318,000 barrels a day in June 2006, when VeraSun had its initial public offering, according to the U.S. Energy Department.
Farm Politics
Rising feed costs caused third-quarter profit to plunge 92 percent at Tyson Foods Inc., the nation’s largest meat producer. Pilgrim’s Pride Corp. said Sept. 25 it may breach a credit covenant because of a “significant” loss in the quarter ended Sept. 27. Pilgrim’s Pride shares dropped 24 percent on Oct. 17 amid speculation the company may file for court protection from creditors.
Record prices for corn, soybeans and wheat in the past 12 months helped boost net farm income to a record $95.7 billion this year, according to the U.S. Department of Agriculture. There are about 2 million farmers in the U.S., according to the USDA. Farm belt states that voted Republican in 2004, including Colorado, Indiana, Iowa and Ohio, went to Obama this time.
`Zero Margins’
“We know that corn farmers like ethanol very, very much,” said Pavel Molchanov, an analyst at Raymond James & Associates in Houston. “Corn farmers have a lot of political influence in swing states such as Iowa and Missouri. Certainly ethanol continues to enjoy some support because of its political and electoral significance.”
Corn futures traded in Chicago more than doubled in the past three years to almost $8 a bushel as worldwide demand expanded to make sweeteners and fuel. U.S. ethanol prices dropped 5 percent because output from new mills grew faster than demand, damaging profit for distillers.
“Obama has clearly said part of his energy policy has been for renewable fuels, including ethanol,” said Ronald Miller, chief executive officer of Aventine Renewable Holdings Inc., a Pekin, Illinois-based ethanol producer, which delayed the opening of a plant in Aurora, Nebraska, until the second quarter. Producers “are managing the day-to-day business on near zero margins,” he said.
Advanced Biofuels
Obama, 47, plans to spend $150 billion over 10 years to develop renewable fuels and to create 5 million so-called green collar jobs. He will also require at least 60 billion gallons of advanced biofuels be produced by 2030. Ethanol is a form of alcohol created by fermenting and distilling the starches from corn and other crops.
Bush’s Energy Independence and Security Act, passed in December, called for ethanol production to more than double to 15 billion gallons in 2015 from 6.5 billion last year. The U.S. pays oil refiners 51 cents in tax credits for each gallon of ethanol they blend into regular gasoline. A 54 cent-a-gallon tariff is slapped on imports from Brazil to protect and stimulate U.S. production.
Obama supports the mandate and wants to expand it and move toward so-called cellulosic ethanol, Zichal said. Cellulosic ethanol is derived from non-food crops such as switch grass and wood chips.
Speaking in Missouri in July, Obama said corn-based ethanol isn’t “our best strategy” because of its impacts on food, adding the current additive will usher in commercial production of cellulosic.
Bad Hedges
“He very much sees it as an important bridge fuel and important source of revenue for many rural communities but something that is the beginning of hopefully a greater investment and greater commitment to advanced biofuels,” Zichal said.
Falling margins caused Gateway Ethanol LLC, Heartland Ethanol LLC, LiquidMaize LLC, Greater Ohio Ethanol, Glacial Lakes Corn Processors and Abengoa SA to curtail production.
Biofuel Energy Corp., based in Denver, said in August that it didn’t have enough money to cover $46 million in losses on contracts for corn, ethanol and the natural gas used to run its distilleries. The company locked in third- and fourth-quarter corn costs of $7.01 and $6.90 a bushel, respectively. Corn plunged to about $4 a bushel for December delivery on the Chicago Board of Trade.
Failure stems from “the way they operate their companies rather than the government support,” said Ian Horowitz, an analyst at Soleil Securities Corp. in New York. “You can’t policy your way out of bad hedging positions.”

Spokesman-Review, The (Spokane, WA) — Sep. 21 — Washington farmers can grow almost anything, but they are not growing much fuel.

Despite excitement over the potential to reduce greenhouse gas emissions and make the United States more energy independent, biofuels have so far not fully taken root, despite fertilization in the form of state loans.

Biodiesel, the focus of most state development efforts, is still not cost-competitive compared with petroleum-based fuel, experts say. And high commodity prices have farmers sticking with the crops they know instead of unfamiliar oilseeds like camelina, the main feedstocks for biodiesel production.

By the end of this year, some of the $13 million set aside by lawmakers for five proposed biofuel projects will likely be returned to Olympia, including $2.6 million awarded the Spokane County Conservation District. The money can be re-allotted to biomass or other bioenergy projects, but more help for biodiesel is not likely until the economics make better sense.

Even the state’s showcase biofuel plant, the privately funded $78 million Imperium Resources refinery at Hoquiam, has lost partners and laid off employees.

Pending requirements that fuels consumed in Washington be at least 2 percent ethanol or biodiesel will not help much, said Peter Moulton, senior energy policy specialist for the state Department of Community, Trade and Economic Development.

Ethanol, mostly distilled from corn in the U.S., is a gasoline additive that has been used for years to help reduce urban pollution. Ethanol already constitutes more than 6 percent of gasoline used in Washington.

Biodiesel is refined from oil pressed from canola, camelina, mustard and other seeds, although other fats can be used. Only 0.7 percent of the diesel burned in Washington is biodiesel, Moulton said.

But with nothing in the law providing for enforcing the alternative-fuel requirements, he said, they are more a goal than a mandate.

He said the state itself, primarily the ferry system, will have to provide much of the lift if the 2 percent goal for biodiesel use is to be reached.

Because biodiesel costs more than conventional fuel — ethanol, however, is cheaper than gasoline — King County Metro Transit earlier this year backed off a commitment to use 20 percent biodiesel, he noted.

Controversy over whether crops grown for biofuel production are displacing food crops also figured into Metro’s decision, but Moulton dismissed those concerns.

Seed crops can be rotated with wheat, for example, or grown on land unfit for other crops, he said.

Moulton said biofuels could get a significant boost this week when seven states and four Canadian provinces outline plans for achieving greenhouse gas reductions that are part of a Western Climate Initiative launched last year.

While the economic, environmental and ethical crosscurrents get sorted out, Washington’s biofuels industry struggles.

“We’re weathering a bit of a storm right now,” said Nikola Davidson, program director for the Northwest Biofuels Association.

Domestic growers have little interest in seed crops, she said, and a weak dollar has undermined the economics of Imperium, for one, by making imported seed too expensive.

Attracting capital for biofuel plant investment is tough when the price of feedstock crops hangs on the weather in Australia, or on gyrations in currency markets, Davidson said.

The association last month published a letter responding to critics who blame biofuels for higher food prices and question whether the energy and expense of growing fuel makes economic or environmental sense.

While acknowledging the challenges, the letter says biofuel development has attracted $500 million in investment and generated new jobs and tax revenue, mostly in small communities. Also, it says, these early efforts will be a bridge to second-generation crops and plants that will go much further fulfilling the promise of biofuels.

“It takes a while to build infrastructure,” Davidson said, and the region is gradually filling in the gaps that will create a more mature industry.

Meanwhile, the smaller biofuel plants that are operating in Creston, Sunnyside and Burbank, near the Tri-Cities, are scrambling for whatever raw material they can get, from canola to chicken tallow.

The Natural Selection Farms seed crusher at Sunnyside takes in camelina seed shipped almost 1,000 miles from Culbertson, Mont., and presses out the oil. Great Plains Oil & Exploration, which supplies the seed, processes and markets the oil and the leftover solids, called cake, that make a high-protein cattle feed.

Natural Selection Farms President Ted Durfey said Great Plains wants to double plant production, in part with camelina grown by Sunnyside-area farmers.

Camelina is an attractive crop, he said, because it will grow on arid land. The cake, meanwhile, can be sold to area dairies. A biodigester can convert manure from those operations into fertilizer and electricity.

“We’re creating our own sustainability,” he said. “It just takes time.”

Time will apparently run out on the Spokane County Conservation District’s effort, in conjunction with farm cooperatives in the area, to build a seed crusher and biodiesel refinery.

District spokesman Jim Armstrong said the project’s economics looked attractive in 2006 when wheat was selling for less than $5 a bushel, but as commodity prices spiked — to more than $10 per bushel in the case of wheat — there was little enthusiasm for planting canola.

“I don’t blame them for sort of sitting back,” Armstrong said.

Feedstocks are the problem for the Columbia BioEnergy refinery at Creston, said co-Founder Brad Lyons.

He said the plant operates below capacity despite strong demand for its product by customers like the Eastern Washington Gateway Railroad, which has been running on a biodiesel mixture for three months.

Lyons said plant managers have supplemented oil seed with waste cooking oil in their effort to seize on every raw material possible.

The privately funded facility is holding its own financially, he said.

A Washington State University research team led by natural resources economist Jonathan Yoder is looking at the feedstock problem and others that have come into better focus as lawmakers, environmentalists, farmers and end-users gain more real-world experience.

The group will report to a legislative committee in December.

Besides feedstock availability and economic potential, the study will also look at market incentives for biofuel production, and how to promote more research.

“In my book, every policy out there is not well-targeted,” Yoder said. “They are written as if designed solely to help agricultural production.”

Other factors, like emissions and the proper balance between public assistance and private risk, need more attention, he said.

“There’s an awful lot going on that frames the biofuels issue,” Yoder said.

Like the Biofuels Association, he said, the WSU panel may suggest that early state efforts to foster biofuels may just set the stage for the development of next-generation fuels like cellulosic ethanol and diesel that can be manufactured from wood waste, grasses and other non-food materials, even algae.

Ralph Cavalieri, director of the WSU Agricultural Research Center, said answers must be found, not just for Washington, but to respond to tremendous increase in demand on all world resources as more countries and their citizens become more prosperous.

The United States, after decades of wasted time, must help respond to the challenge, he said, and it does not have to be all that complicated.

“Think of the moon shot,” Cavalieri said. “That’s a much more complex issue than this one.

“I hope we have the courage to stay the course.”

Author: Bert Caldwell, The Spokesman-Review, Spokane, Wash.

For Ford Heights and other agricultural towns, the “green- collar” job revolution envisioned by federal biofuel mandates is a dream deferred. Knee-high grass and old tires cover the site as record prices for corn, the main ingredient in ethanol, discourage investment in new plants.

The $20.8 billion industry may have itself to blame. Breakneck construction led to 168 ethanol plants, already producing more than U.S. mandates require for the fuel additive this year. The distilleries buy so much corn — as much as a third of the U.S. crop this year — that they have contributed to price increases, the U.S. Department of Agriculture says.

“I kept saying they’re going to kill the golden goose,” says Jim Jordan, president of Jim Jordan & Associates LP, a Houston fuel-consulting company. “We have in fact overbuilt. This thing is pretty devastating.”

U.S. President George W. Bush and Democratic presidential candidate Barack Obama, a senator from Illinois, have backed ethanol as a way to support American farmers and reduce dependence on imported oil. It’s distilled from corn kernels in the U.S. and blended into gasoline. One corn bushel yields 2.75 gallons of ethanol.

Food Inflation

Initial enthusiasm has given way to concern that diverting crops for fuel is accelerating a rise in food costs. Riots have erupted over shortages from Haiti to Egypt.

Some U.S. food companies, including Springdale, Arkansas- based chicken producer Tyson Foods Inc., formed a “Food Before Fuel” coalition in June to oppose ethanol mandates. John McCain, the Republican presidential nominee and Arizona senator, has “traditionally been opposed to ethanol subsidies that distort the market,” says Tucker Bounds, a spokesman.

Ethanol may account for 20 percent of the gain in the rate of U.S. food inflation, says Ephraim Leibtag, a USDA economist. U.S. food prices may climb 6 percent this year, the most since 1980, the department estimates.

The overcapacity prevents lenders from financing ethanol plants that distill ethanol from corn kernels, says Mike Tian, an analyst at Morningstar Inc. in Chicago.

“A lot of these towns that hoped to get an ethanol plant probably aren’t,” he says.
Ford Heights Mayor Saul Beck says he was ecstatic in 2006 about having a distillery in his town of 3,300, where the U.S. Census found that 49 percent of residents live in poverty.

At least three ethanol producers went public that year, including Aventine Renewable Energy Holdings Inc., VeraSun Energy Corp. and Green Plains Renewable Energy Inc. in Omaha, Nebraska. At one point, the American Coalition for Ethanol tracked 500 planned plants, says Ron Lamberty, a vice president at the Sioux Falls, South Dakota, trade group.

Falling Margins

When Ford Heights Ethanol applied for a permit for its proposed $130 million plant, producers pocketed an average of $2.64 on every gallon made. By Sept. 10, rising corn prices reduced that margin to 57 cents, Bloomberg data show. Corn has risen 58 percent in the past year, to $5.3675 a bushel.

“This is a major bump in the road,” says Walker Filbert, president of Heartland Ethanol LLC in Knoxville, Tennessee, which abandoned plans to build seven plants in Illinois.

In Ford Heights, charred remains of homes pepper the plant site’s neighborhood.
“It would have brought some jobs,” says Beck, 71. “They got the permit and we haven’t heard anything else.”

Lenders balked at funding the project, says Jonathan Kahn, president of Ford Heights Ethanol: “One of our biggest regrets is that we couldn’t get manufacturing in a community that so desperately needs it.”

On Hold

Across Illinois, 795 million gallons of ethanol are on hold, Chicago-based investment
firm William Blair & Co. estimates. That’s slowed construction and growth in permanent ethanol-related jobs, says Tom Hauser, vice president of CoBank, an Omaha-based lender to ethanol companies. Each plant employs about 50 people, who earn $40,000 a year on average, he says.

Producers’ shares were battered. Aventine, based in Pekin, Illinois, fell 88 percent
from June 2006 through Sept. 10. VeraSun of Brookings, South Dakota, dropped 78 percent; and Green Plains declined 82 percent.

The 168 plants had capacity for 9.96 billion gallons as of Aug. 26, almost 1 billion
more than the U.S. requires this year, the Washington trade group Renewable Fuels Association says. Another 43 plants scheduled to be built or expanded would raise capacity to 13.8 billion gallons. Most make ethanol from corn.

Alternate Sources

Even established corn-ethanol producers put more emphasis on making “cellulosic”
ethanol from alternate sources such as wood chips. The still-imperfect process doesn’t promise immediate benefits for towns with nearby corn growers.
Poet LLC, which is based in Sioux Falls and is the largest U.S. ethanol producer, said in August it will open a $4 million South Dakota plant to produce ethanol from corn cobs by year- end. The capacity will be 20,000 gallons.

Asked whether Obama may reduce his support for corn-based ethanol as president,
spokesman Tommy Vietor referred to an April speech in Indiana:
“We have to recognize that corn-based ethanol is a transitional technology,” the candidate said then.

By Emily Kaiser
ST. PAUL, Sept 1 (Reuters) - U.S. Republicans called on Monday for an end to a controversial requirement that gasoline contain a set amount of ethanol, a policy backed by the Bush administration that critics say has helped drive up world food prices.
In their 2008 platform detailing policy positions, Republicans said markets — not government — should determine how much ethanol is blended into gasoline, and pushed for development of a cellulosic version, which could be made from grasses rather than corn.
“The U.S. government should end mandates for ethanol and let the free market work,” the platform said. It was unanimously passed at the Republican National Convention in St. Paul, Minnesota.
The position marks a major change from the 2004 platform, which supported expanding the use of ethanol as a way to reduce dependence on foreign oil and increase revenues for farmers.
While farm income has risen, food companies have complained that ethanol demand diverts corn from the food supply, driving up commodity costs and hurting their business. Many have raised prices, hitting consumers with heftier grocery bills as the economy fades and unemployment rises.
An industry spokesman said ending the program would be a mistake.
“Ethanol is providing a desperately needed, stable supply of motor fuel as we see threats to oil availability continue, either because of geopolitical unrest evidenced by Russia’s invasion of Georgia or by Mother Nature in the form of Hurricane Gustav,” said Matt Hartwig, spokesman for The Renewable Fuels Association.
“And, if it were not for ethanol, gasoline prices that have wreaked havoc on household budgets would be up to $0.50 higher per gallon,” he said.
President George W. Bush has been a strong backer of use of ethanol as fuel, and has touted it repeatedly in his annual State of the Union addresses. The current Renewable Fuel Standard requires 9 billion gallons of ethanol to be blended into the nation’s gasoline supply this year.
A growing number of lawmakers from both political parties have voiced objections to that policy as inflation pressures build in the United States and abroad.
FOOD VERSUS FUEL
In August, U.S. regulators rejected a request from Texas Gov. Rick Perry to halve the ethanol mandate, which he blamed for driving up the price of corn and making it more expensive for farmers to feed their livestock.
Douglas Holtz-Eakin, economic adviser to Republican presidential candidate John McCain, said the campaign did not ask the platform committee to include that provision, but McCain had long supported eliminating the ethanol mandates.
“This is a great piece of support for his principles,” Holtz-Eakin told Reuters in a videotaped interview.
John Miranowski, an agricultural economist at Iowa State University, said unless oil prices fall to $60 per barrel, ethanol will still be a cost-effective choice even without the government mandating its use.
Oil traded at $111 per barrel on Monday.
That makes this a politically smart time to push for eliminating the mandate because it would please the food industry without punishing farmers, an important voting bloc, as the November presidential election approaches.
“As long as the price of oil stays high, the ethanol plants can continue to pay a high price for corn,” he said “There’s very little (political) cost right now.”
Corn prices have retreated from a late-June peak of $7.79 per bushel, but are still up some 50 percent from a year ago.
High food prices have become a global problem, pushing some poor countries to the brink of starvation and creating headaches for policymakers in rich nations struggling to contain rising inflation.
The World Bank has warned that soaring food costs threaten to undermine years of poverty-reduction work. A top World Bank economist said in July that biofuels production in the United States and Europe was the main reason behind the steep rise in global food prices.
In the platform, Republicans said farmers needed technology to increase crop production and meet the growing global demand for food and called on the Agriculture Department to support agricultural research “to ensure that America and the world will never have to choose between food and fuel.” (With additional reporting by Corbett Daly; Editing by Howard Goller and Patricia Zengerle)