Monday, August 13, 2012

United Nations joins call for ethanol moratorium

José  Graziano Da Silva, head of the United Nations’ Food and Agriculture Organization (FAO), is pressuring the United States to suspend its requirement that gasoline contain at least nine per cent ethanol this year.
Da Silva says global food prices rose by six per cent in July, driven higher by surging corn and soybean prices in the United States where drought has impacted the futures market.
Da Silva wrote about his concerns in the Financial Times of England, saying the worst U.S. drought in 56 years has reduced the corn crop and “much of the reduced crop will be claimed by biofuel production in line with U.S. federal mandates, leaving even less for food and feed markets.
"An immediate, temporary suspension of that mandate would give some respite to the market and allow more of the crop to be channelled towards food and feed uses," he wrote in his editorial.
The U.S. ethanol law means at least 40 per cent of the U.S. corn crop will be used to produce ethanol. U.S. beef, hog, poultry and dairy farmers have already lobbied politicians to suspend the ethanol mandate and they have been joined by meat packers and food processors.
So far there is no similar movement developing in Canada, nor did Da Silva say anything about provincial mandates, such as Ontario’s that requires five per cent ethanol in gasoline.
Despite two hotly-contested by-elections in Ontario, Premier Dalton McGuinty has not been challenged, nor has he commented, on Ontario's ethanol mandate.