Easing U.S. ethanol mandate would help prevent food crisis: UN

The program faces growing critics, it also has strong support from Farm Belt politicians

Global pressure on the United States to relax its ethanol quota mounted on Thursday as the top United Nations food official said an “immediate, temporary suspension” of the mandate could help head off another world food crisis, according to Reuters story.

“As the surge in corn prices revives a fierce food versus fuel debate, José Graziano da Silva, the director-general of the UN’s Food and Agriculture Organization, wrote in the Financial Times newspaper that competition for a U.S. corn crop that has been decimated by drought was only going to intensify. […]

“Under the five-year-old Renewable Fuels Standard (RFS), U.S. fuel companies are required to ensure that 9 percent of their gasoline pools are made up of ethanol this year, which means converting some 40 percent of the corn crop into the biofuel.

“Silva joins a growing and diverse chorus of people calling for an unprecedented waiver or suspension of the RFS. This week, 25 U.S. Senators urged the Environmental Protection Agency (EPA) to adjust the mandate, while the chief executive of grains giant Cargill said the free market should dictate biofuels use.

“Livestock producers, which are forced to bid against ethanol producers to secure costlier grain for feed, were first to ask for relief. However, the EPA has yet to receive an official petition for a waiver, which can only come from a fuel blender or a state governor, according to the legislation.

“Silva said that the world food system had not yet reached a crisis point, but reiterated warnings against the kind of export restraints and panic buying that extended the surge in 2008.”

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