Ethanol Partly to Blame for Food Inflation

Washington DC April 14, 2008; The AIADA newsletter reported that finance ministers gathered this weekend to grapple with the global financial crisis also struggled with a new, but old problem: food shortages.

According to the Wall Street Journal, surging commodity prices have pushed up global food prices 83 percent in the past three years, according to the World Bank - putting huge stress on some of the world's poorest nations.

Many policy makers at the weekend meetings of the International Monetary Fund and World Bank agreed that the U.S. policies pushing corn-based ethanol and other biofuels as deepening the woes. "When millions of people are going hungry, it's a crime against humanity that food should be diverted to biofuels," said India's finance minister, Palaniappan Chidambaram.

James Connaughton, chairman of the White House's council on environmental quality, said the U.S. is working on developing "second generation" biofuels that would use varieties of grass or agricultural wastes - not food - as source material. "That's where we need to get to go," he said.