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The United Nations has called for an immediate suspension of government-mandated US ethanol production, adding to pressure on Barack Obama to address the controversial food-versus-fuel debate in the run-up to presidential elections.
Arguments for and against ethanol made from corn pit crop-farming states like Iowa – which benefit from higher corn prices and some of which are swing states – against livestock-rearing states such as Texas that see ethanol driving up their input costs.
The UN intervention will be seized upon by state governors, lawmakers and the meat and livestock industry, who have expressed alarm at surging prices for corn. Group of 20 countries including France, India and China have already expressed concern about the US ethanol policy.
The US is set to divert around 40 per cent of its corn into ethanol due to the Congress-enacted mandate in spite of “huge damage” to the crop because of the worst drought in at least half a century, José Graziano da Silva, director general of the UN’s Food and Agriculture Organisation, warned.
“An immediate, temporary suspension of that [ethanol] mandate would give some respite to the market and allow more of the crop to be channeled towards food and feed uses,” he wrote in an opinion piece in the Financial Times.
However, some analysts argue such a suspension could have a lower impact on food prices than expected. Even disregarding the mandate, US refiners need billions of gallons of ethanol to meet environmental specifications for their gasoline. Moreover, ethanol is now a huge component of global energy supplies, and the suspension of the mandate could push up oil prices.
Tom Vilsack, US agriculture secretary, raised doubts about the impact of waiving the ethanol mandate, arguing that the US biofuel industry had reduced petrol prices and created jobs. In addition, high corn prices were already curbing ethanol production, he said. Adjusting the mandate “may not do what some people think it will do,” he told the Financial Times in an interview.
Amid worries about a food shortage later this year, Mr Graziano da Silva said the situation was “precarious”, but it was not yet a crisis. He added: “risks are high and the wrong responses to the current situation could create” a crisis.
Corn, soyabean and wheat prices have surged between 50 and 30 per cent since June after the US endured the hottest July since temperature records began 117 years ago. The US Midwest farm-belt has also seen little rain for months.
Corn prices surged on Thursday within striking distance of their all-time record as traders bet that the US Department of Agriculture will reveal a huge drop in the country’s crop production in a report on Friday. As America exports nearly half the world’s corn, a third of the world’s soyabeans, and up to a fifth of the world’s wheat, changes in US supply have a significant impact on global agricultural markets.
“With world prices of cereals rising, the competition between the food, feed and fuel sectors for crops … is likely to intensify,” Mr Graziano da Silva said.
Last month, a coalition of beef, pork, chicken and dairy producers petitioned the US Environmental Protection Agency to waive the ethanol mandate in response to rising corn prices. US lawmakers in the House and Senate, many representing states with large poultry and livestock operations, have also lobbied the EPA.
Officials and lobbyists said several governors were planning to join lawmakers next week petitioning the EPA, triggering a 90-days legal process that will force the Obama administration to rule whether to waive the ethanol mandate.
In 2008, EPA denied a waiver request from the state of Texas, the nation’s biggest cattle producer. But since then hostility towards corn-made ethanol has grown and US lawmakers have already cut billion of dollars in subsidies to the sector.
发表于 2012-8-10 04:52:51
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发表于 2012-8-10 11:26:52