Artificially Inflated Food Prices due to Corn Subsidies and Ethanol Subsidies

End ethanol Subsidies to Lower Food, Land Prices

by The Gazette Opinion Staff  ::  UPDATED: 21 April 2011

Cropland prices are skyrocketing to absurd levels due to both increased corn prices and government subsidy. As more cash is put into the hands of farmers, that cash is reinvested into farmland, further pushing up the costs not only of cropland but any other piece of ground.

Ethanol is Highly Subsidized and Inefficient

Compounding the issue is the strain being placed on our corn supply due to ethanol. More than 30 percent of corn is used to manufacture ethanol, a product that requires more energy per unit volume to produce than to produce the same volume of gasoline, and which contains less energy per unit than gasoline.

This demand being placed on corn production is a cornerstone to increasing food prices; the other cornerstone to increasing food prices is fuel, and while ethanol was sold as a means to supplement and suppress fuel prices, in the end, E85 is only 50 cents cheaper than regular unleaded — and the distance a gallon of E85 can take you is less than a gallon of gasoline. Ethanol is subsidized by the government, which means that the taxpayer is subsidizing artificially inflated land and food prices.

If the ethanol subsidy were to cease, food prices would drop, land prices would drop, and a significant amount of marginal farmland would go to being pasture. Ethanol subsidies need to end.

David Sheets

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