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ABOUT KEN

Ken Cook is president of Environmental Working Group, a public interest research and advocacy organization known for its Farm Subsidy Database. The author of dozens of articles, opinion pieces and reports on agricultural, public health and environmental topics, "[Cook's] fingerprints can be found on nearly two decades of U.S. farm law" (Omaha World Herald). Read more about the authors.

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« McCain, In Iowa, Says He Would Veto The Farm Bill | << Back to main page | Farm Bill: Race Horses, Big Farms Win, Poor Kids Lose »

Supermarket Sticker Shock, Subsidy Windfalls
October Surprise?

The hearing of the Joint Economic Committee yesterday gave us our first panoramic glimpse of what politicians who live outside the farm and ethanol subsidy bubble are making of rising food and fuel prices.

With high food prices prompting grocery-store apologies to customers and raising fears of starvation in impoverished countries, Congress suddenly faces renewed pressure to cut subsidies to the wealthiest farmers and incentives for ethanol production.

The American farmer, long an untouchable political icon, has even become something of a political embarrassment on Capitol Hill, with President Bush earlier this week demanding an end to crop subsidies for "multimillionaire farmers."

Of course, the vast majority of politicians live outside that bubble. We just haven't been hearing from them much about biofuels and farm subsidies this past year, compared to their agriculture committee colleagues, who have largely had the farm bill stage to themselves.

But with their constituents screaming, first about high gas prices and now about the escalating cost of food, politicians of every stripe are scrambling for talking points. Because fingers are starting to point, and they are pointing towards Washington.

EWG spent a substantial amount of time last year warning congressional staff, and some of our respected colleagues in the environmental community, about the extreme environmental and economic risks of the ethanol boom and the policies fueling it, notably the aggressively expanded renewable fuel standard in the energy bill.

Almost no one listened. Democrats in charge, with the exception of John Dingell's staff, blew off concerns about water and air pollution and wildlife habitat. They wouldn't listen to warnings, emerging even then from Tim Searchinger and others, about the damage a vegetation-based fuel system was likely to do to the climate through the ecological dumbing down of landscapes worldwide.

And no one paid the slightest attention when EWG and others described the disturbing prospect that a patch of bad weather, particularly in the Corn Belt, could in the context of already tight grain and oilseed supplies help trigger a politically potent jump in food prices.

But Congress was driving drunk on ethanol. So were some environmentalists. In most cases the compulsion was political. Get rid of enough corn through ethanol, the inebriated thinking went, and you could bring in enough votes to pass an energy bill that boosted renewable electricity with money trimmed from oil company profits and tax breaks. Ethanol could buy votes for better fuel economy standards and tax breaks for wind and solar. Ethanol could leverage it all, and besides, it was inevitable--it could not be fought. In fact, most energy bill afficionados seemed to feel that without a huge corn ethanol mandate, no matter what one might think about its merits, nothing else good in energy policy could move.

It turned out their judgment was impaired. Once President Bush's opposition killed any tax consequences for the oil and gas industry, and once the utility industry killed off renewable portfolio standards, we were left with an energy bill so threadbare compared to the one we started with last year that Democrats had to present it with apologies and excuses to the environmental community. And with promises that the vitally important provisions that had suddenly been taken off the table would defintely be put back on through another round of legislation this year.

But it was also made clear that Democrats had to have an energy bill in 2007. With so much at stake politically, they expected environmentalists to support an energy bill made up of leftovers. And many environmentalists did just that.

We didn't. EWG opposed the biofuels provisions of the energy bill, and did not support the overall bill as a result. Why? Because not even modest emergency ramps were included (or even seriously considered) for the runaway corn-ethanol industry. Democrats rejected the idea of requiring that corn feedstock be grown with even modest environmental safeguards (nutrient management plans, setbacks from water bodies). Democrats rejected the suggestion that we should make provision for a breather, a hiatus, in the manic expansion of corn ethanol if food price or ecological shocks emerged. Democrats rejected the notion that the nation should first demonstrate the technical and economic viability of "sustainable" biofuels, a mythical form of fuel no one seems able to describe, before mandating the creation of a gigantic corn grain ethanol industry.

We were also lukewarm--no, make that tepid--about the unhurried redemption of the bill's languorous CAFE plank (35 mpg fleets just 13 years away), which itself involved even more biofuels sleight of hand. What we need are fuel-efficient vehicles. What we're getting--Presto!--are hulking "flexfuel" E-85 behemoths from the truck nuts in Detroit, who get credit towards their CAFE requirements for turning out these "green" vehicles even if everyone fills them up with OPEC regular.

EWG does not share the view of some environmentalists and the food-to-fuel lobby that biofuels "done right" are an important part of the climate change puzzle, because there is no evidence they will ever be done right.

As I've written here before, EWG does not buy the "transition" fantasy about biofuels, in which through all manner of billion-dollar policy blandishments the U.S. constructs a 15 billion-gallon industry of corn grain-based ethanol, and then will supposedly transition our way to thousands of square miles of "sustainable" biofuel feedstock, prefereably grown on "marginal land" that will complement or, in the deepest delusions, displace corn as a feedstock.

Why not just plan to hitch our SUVs to unicorns and call it a day? I bet they'd love switchgrass. And the sight of them grazing in endless verdant fields dotted with solar panels and windmills--paid for with excess profits recovered from oil companies--is sure to have a calming effect on voters and teenage girls.

But this fall? Not so much. This fall voters will be wondering why the leaders who promised to bring about so much change have brought instead a food-to-fuel policy contraption that adds to the gouge at the grocery story whatever it may alleviate in the gouge at the gas pump.

And that's under the best of circumstances, assuming everything goes according to Washington's brilliant plan to make it all work out. Which is a plan, at its core, to have good weather--always. If there's a glitch, if we have seriously bad weather and a significantly reduced grain crop this year (a year we began with uncomfortably tight grain supplies), the complaints politicians are hearing today about food prices will be nothing compared to the howls they'll hear in October. With a bad summer in the Corn Belt, by election time every aisle in the grocery store will register with voters like one long attack ad to throw the bumbs out.

If Speaker Pelosi's statements so far on rising food costs are any indication, many Democrats, in lock step with the Farm Bureau and the ethanol lobby, will try to blame it all on oil companies. That is no more truthful than a claim that all of the food cost increases can be blamed on ethanol, but it is transparently more pathetic. And it probably won't work.

Just months after they were crowing about an energy bill that supposedly put our nation on the path to "end our addiction to oil," politicians are already complaining they got bad intelligence on ethanol.

Who knew that food prices could possibly be affected by cramming 25 percent of the nation's corn into the back ends of the Ford Tundras and Nissan Armadas that grace the parking lots of every shopping mall in the land?

To be perfectly honest, in all candor--frankly, I say quite frankly--no one saw this coming.

Sharply rising food prices may force Congress to reconsider the fivefold increase in ethanol production it mandated just four months ago, some lawmakers say.

Few members appear willing to call for the outright repeal of the Renewable Fuels Standard (RFS), which requires that 36 billion gallons of ethanol be produced by 2022. Of that, 15 billon gallons would come from corn.

But the new concerns represent a significant turn for a policy issue that was embraced by both congressional Democrats and President Bush as a way to boost rural economies and domestic energy security.

“We certainly did not anticipate what’s happened, if that was the cause,” said Sen. Pete Domenici (R-N.M.), ranking member of the Energy and Natural Resources Committee.

“We don’t know how much of the food crisis was caused by it, but nobody expected it to cause much.”

Committee Chairman Jeff Bingaman (D-N.M.) added: “I think it’s something we need to look at.”

We'll just have to see how the ethanol intelligence failure story goes down with voters as they clip the grocery coupons they've anxiously scavenged from their newspapers, assuming we still have newspapers. Who knows what they'll think as their scissors snip around accounts of six-figure farm subsidy payments being sent by Congress to the largest, most prosperous farming operations in the country, stabilizing their ride across a still-cresting wave of record-high crop prices, unprecedented profits, and surging real estate values.

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