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Blog

    Ethanol Mandates Hitting Urban Poor

    03/17/2008

    Agribusiness welfare-- from farm subsidies to the ethanol fuel mandate-- is helping drive up feed and food costs throughout the supply chain.  Congressional and Bush Administration policy favors corn farmers over everyone else, and higher prices are the result of recent changes in U.S. energy (and monetary) policy.  Higher global food prices mean starvation in the poorest parts of the world, and they mean belt-tightening in the neediest corners of America.  The New York Times covers the impact in a poor Brooklyn neighborhood:

    The price of corn is high because of rising global demand for food and because of a new government mandate to increase production of ethanol, a motor fuel made from corn. With the stockpile of corn diminished, less is available to feed cows, a situation that in turn makes it more costly to raise cows and hence increases the price of milk.

    Such explanations are of little comfort to shoppers in Crown Heights, where one-fourth of residents have annual incomes at or below the official poverty level, which is $21,200 for a household of four.

    Sonya Castro, a medical assistant who was shopping with her 7-year-old daughter, Kimberly, paused to listen to Mr. Baez’s analysis, then chimed in with her own thoughts.

    “What can I say?” Ms. Castro said. “What I used to buy with $20, now it costs $30. I leave with fewer bags and spend more money.”

    Milk is near the top of the list of staples — others are bread and eggs — whose prices have climbed by 25 percent or more since inflation began to soar in July.