The case for more biofuel

In the growing firestorm of criticisms about ethanol and other biofuels, the facts are being badly burned. Opponents decry policy incentives to encourage the industry’s growth and make specious claims that American biofuels are driving up food prices and perhaps even encouraging the destruction of forests in other parts of the world. But no one is stopping to ask if any of it is true.

Let’s start with the allegedly misbegotten incentives. The United States invests roughly $3 billion a year through a 51-cent per gallon credit to promote the production and use of renewable fuels like ethanol. The return on that investment? Taxpayers are saving approximately $6 billion that would otherwise be spent on counter-cyclical crop price supports, plus an additional $15 billion reduction in the country’s petroleum import bill.
Meanwhile, real world data from the U.S. Department of Agriculture simultaneously belie claims that American ethanol is causing arable land to be cleared elsewhere and food prices to rise.

In fact, the data show that the total acreage devoted to corn in America is not projected to go up, but that annual corn yields are expected to rise steadily – from 155.3 bushels per acre this year to 173.3 bushels per acre in 2017. That helps explain why the USDA also projects that corn supplies for export, feed and other non-biofuel uses will hold steady even as ethanol production expands.

Those steady corn supplies are just one reason you can’t blame ethanol for food price increases. The real drivers of consumer food price inflation, as the USDA or any reputable economist will attest, are non-farm factors like labor costs, energy prices, transportation, packaging and marketing. In fact, all grains and other farm products, combined, account for just 19 cents of the consumer’s food dollar.

The Southern