Wednesday, January 05, 2011

Let Them Eat (Rice) Cake!

From Bloomberg via Drudge:

World food prices rose to a record in December on higher sugar, grain and oilseed costs, the United Nations said, exceeding levels reached in 2008 that sparked deadly riots from Haiti to Egypt.

An index of 55 food commodities tracked by the Food and Agriculture Organization gained for a sixth month to 214.7 points, above the previous all-time high of 213.5 in June 2008, the Rome-based UN agency said in a monthly report. The gauges for sugar and meat prices advanced to records.
As millions of American cars travel the roads today burning $3.20 per gallon gasoline that contains ten percent corn ethanol, the impact of destroying millions of tons of food to create an inefficient and unnecessary fuel additive is either being lost on or ignored by American environmentalists.

In effect, a consortium has been formed between environmentalists with a planet to save, corporate welfare recipients with a bottom line to protect, and malleable politicians with farmer constituents to reward; this so that third-world children lucky enough to actually survive the impending wave of man-made starvation can live long enough on this sustained Earth to propagate the next generation of children who may or may not survive the next.

It is a difficult argument to defend from any angle--the intentional diversion of food away from people who will starve without it. But, with a planet to save (and farmers to appease, corporate bottom lines to monitor, and too-short election cycles) we all have to make sacrifices.
The cost of food climbed 25 percent from a year earlier in December, based on the FAO figures, after Chinese demand strengthened and Russia’s worst drought in a half-century devastated grain crops. The agency’s food-price indicator rose from 206 points in November.

Last month’s year-on-year rise compares with the 43 percent jump in food costs in June 2008. Record fuel prices, weather- related crop problems, increasing demand from the growing Indian and Chinese middle classes, and the push to grow corn for ethanol fuel all contributed to the crisis that year.
Cause and effect.

Fuel prices certainly affect the cost of food production--particularly when a high percentage of food is destroyed in the production of the very fuel needed to plant, harvest, manufacture, and transport. Larger demands on food stocks by developing nations is actually a good thing as it means that millions of poverty stricken people in 3rd world nations have finally managed to shrug off the chains of human misery. And destroying food in order to slake the thirst of my '95 Buick? I've already beaten that horse to death.

It appears as if ethanol proponents have honed in on mitigating the fourth cause of high food prices, that of the weather related crop problems--even if such pin-point accuracy directly exacerbates fuel prices and food supplies. The added benefit of lowering food demand by sustaining world poverty is just a bonus.

Let them eat (rice) cake!
“The real uncertainty and problem is the 2011-2012 market,” Abbassian said. “We are at a very high level. If it’s further up than this, then you really begin to be concerned.”
Unless you are invested in the ethanol market, in which case, it's a measure of success.

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