Senator Chuck Grassley (R-Iowa) says the notion that ethanol is responsible for the rising cost of food is a myth.
Grassley is issuing a passionate defense of farmers growing corn for ethanol -- the same farmers some are blaming for the rising cost of rice, bread, and even fruit. He contends the ethanol industry is being unfairly "clobbered" even though it has been good for agriculture, jobs in rural America, and has made the U.S. less dependent on foreign sources of oil. According to Grassley, several factors -- including countries like Argentina and the Ukraine putting export taxes on grain -- have contributed to the rising cost of food. "You've got a 100-year record drought in Australia. No production of wheat last year. They're our major exporter of wheat. That's contributing to the increased price of bread today. You've got oil spiking up. Every time a German worker is kidnapped in Nigeria or a pipeline is blown up in Nigeria, you read about it in our business pages, increasing the price of energy or [Hugo] Chavez saying he's not exporting to our country," Grassley contends. Grassley believes people who blame the ethanol industry for rising food prices have a "misunderstanding of agriculture." He estimates that a farmer gets only about five cents for every $5 box of corn flakes. "You know Iowa was the number-one corn-growing state in the nation. You get the impression that corn is replacing wheat. Well, not in Iowa, let me assure you. There wouldn't be wheat planted where we aren't planting corn. Farmers responded last year to the most acres planted of corn since 1984. Why? Because of food needs and because of fuel needs. Farmers are responding," Grassley points out. Grassley believes the high cost of energy is the biggest reason for the increased price of food. To bolster his support for ethanol subsidies, he points to an Iowa State University study that claims fuel is 30 or 40 cents less than it would be if there was no ethanol industry.
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