This is what happens when the government distorts markets with subsidies, mandates and protectionism.
Recent laws in the United States and Europe that mandate the increasing use of biofuel in cars have had far-flung ripple effects, economists say, as land once devoted to growing food for humans is now sometimes more profitably used for churning out vehicle fuel.
In a globalized world, the expansion of the biofuels industry has contributed to spikes in food prices and a shortage of land for food-based agriculture in poor corners of Asia, Africa and Latin America because the raw material is grown wherever it is cheapest.
Now that the United States is using 40 percent of its [corn] crop to make biofuel, it is not surprising that tortilla prices have doubled in Guatemala, which imports nearly half of its corn…Roughly 50 percent of the nation’s children are chronically malnourished, the fourth-highest rate in the world, according to the United Nations.
“To make things worse: evidence suggests that the corn ethanol program, for the sake of which callous greens condemned the world’s poor to higher food prices, is a failure even on environmental terms and fails to reduce greenhouse gasses,” writes Walter Russell Mead. “We’re betting that this news won’t dent greens’ self-confidence.”
I’m not even sure how behind biofuels the green movement is these days. It seems they’ve started abandoning ethanol, for instance, leaving Big Agriculture as the last big supporter.
Because let’s be honest, if ethanol were ever really about the environment and secure energy (and not making lots and lots of money for certain well-connected agriculture interests) we wouldn’t have protected the domestic ethanol market with sky-high tariffs on imported ethanol.