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Jill Buck is the Founder and Executive Director of the Go Green Initiative and is also the owner of Buck Consulting. Jill lives with her family in Pleasanton, California. Full Bio
Why Ethanol May Change Your Grocery Bill
By: Jill Buck
For the past few years, we've heard that ethanol was the wave of the future - a clean and green form of fuel. Brazil has been praised for converting the overwhelming majority of its vehicles to ethanol, and venture capitalists have been falling all over themselves to get a piece of the action in what they thought would be the gold rush of the 21st century. However, within the past 2 weeks, reports have surfaced that officials in the U.N. are opposed to the rapid expansion of crops around the world being used for ethanol fuel. Why? Because they say that the price of food is skyrocketing, particularly for food items that are considered to be a staple to the diets of both humans and livestock.
The Economics of the Issue: currently, many governments are subsidizing crops that are being used to develop ethanol, which means that corn that was once used for just food can be sold a higher price when it is used for government-subsidized fuel. So for the farmer trying to feed his/her family and give them the best life possible, what would motivate him/her to sell the crops for a lower price for food when selling it for fuel is much more lucrative? Answer...there is little motivation, and who can blame the farmer? So, the upshot of this situation is that the farmers can ask the same price for crops used for food and fuel, and the price of food goes up. Many worry that the sharp increase in the rise of food prices will dramatically affect those most likely to be subject to famine and hunger, even when the food market is stable.
So...what does that mean for us? There is the potential that our food and grocery bills will go up, not just because of the high price for the gas needed to truck our food to the market, but also because there is a need for balance between the quest for green energy and the world's need for a stable and economically-feasible food supply.