Just about everyone concerned with high food prices have pointed the finger directly at ethanol production. This week, just as the senate passed a bill reducing the tax credit for blenders of ethanol into gasoline by .06 cents a gallon, the USDA and Bush Administration began fighting back against the widely held belief that ethanol is causing more problems than providing solutions.
From the USDA Press Release:
It's true that higher demand for corn for ethanol and soybeans for biodiesel has led to higher prices for those crops over the past couple of years. But we do not have a one on one relationship between higher prices for those commodities and what consumers are paying for foods at the retail level.You can read their entire report, with various experts weighing in on bio fuel and food prices here.
Agriculture Secretary Ed Schafer spoke in a teleconference with reporters on Monday, asking people to call into account other factors in causing food prices to rise so drastically, such as the high cost of oil driving up fertilizer and other farming costs:
With all the recent focus on the impact that bio fuels are having, this fundamental fact seems to get overlooked. The markets, however, keep right on sending us wake-up calls. The price of oil is now holding steady at more than $120 a barrel and giving signs that it might even go higher.
You can find a round up of various news outlets reporting on the teleconference here.
