Food v. Fuel: A Growing Conflict

In mid-August of this year, Arkansas Governor Mike Beebe and North Carolina Governor Beverly Eaves Purdue requested that the Environmental Protection Agency (EPA) waive a portion of the Renewable Fuel Standard (RFS) of the Clean Air Act.

At issue is the fact that the EPA sets annual volume requirements for certain renewable fuels – here, domestic ethanol production.  Presently, the RFS requires that 13.2 billion gallons of the corn starch-derived biofuel be produced in the United States in 2012.

While the stated goals of such an initiative are admirable – among other things, proponents tout energy independence and reduced greenhouse gas emission as natural consequences of these production requirements – the ethanol target has caused a rift between the energy and agriculture industries, who have become competitors for the nation’s dwindling corn crop.  Perhaps surprisingly, the biofuel industry and livestock farmers use roughly the same amount of the nation’s corn, with energy accounting for 40% of the crop and agriculture accounting for 36% for feed.

The RFS is a comparatively new regulatory mechanism, coming into being in 2005 and dramatically expanding in scope in 2007.  Since its inception, corn prices have risen 193%, according to Governor Beebe, among other sources.  In a growing season plagued with national droughts and record temperatures, the ensuing scarcity of domestic corn has caused prices to skyrocket further.  Accordingly – at least as far as the livestock industry argues – we’re faced with a dilemma.  Which do we want to cost more: food or fuel?

The concerns of Governors Beebe and Purdue (admittedly, as advocates for the agriculture industry) highlight an interesting tension between two seemingly dissimilar but equally essential segments of our economy.  In the campaign season, a great deal of coverage has been given to the talking points of energy independence and renewable resources, but very little time has been devoted to food security.  Regardless of one’s feelings towards livestock farming or, for that matter, ethanol as a renewable energy source, the Governors’ letters, coupled with the mounting cry of both the agriculture industry and sympathetic lawmakers, remind us that our policies must square at the end of the day.

It is a certainty that some pundits will tell us our choices at the fuel pump need not overlap with our choices at the table, but it is important to know that in the current regulatory landscape, these two areas appear to intertwine considerably.

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