The American Grocery Manufacturing Association, a trade group made up of about 300 major food companies, has funded an anti-biofuel propaganda campaign designed to turn the U.S. public against renewable fuels.
The Grocery Manufacturing Association (GMA), with funding help from oil and environmental groups, has hired a high-profile agency to bring pressure on Congress to lower federal mandates that promote the use of biofuels. This is happening despite many recent studies that show high oil prices, not ethanol, is the major factor behind high food prices. White House economic advisers say ethanol made from corn is responsible for just 3 percent of the overall increase in global food prices, which are up more than 40 percent this year over last year.
Others dispute that figure, saying biofuels mandates account for one-third to two-thirds of the higher cost of food.American farm organizations have quickly rallied against the GMA campaign. “The single most important factor driving inflation – all inflation, not just food inflation – is oil,” says Bob Dinneen, president of the Renewable Fuels Association. “High oil prices are clearly having a devastating impact on our nation’s economy and are driving food price inflation across the globe.”Farm-state political leaders say food companies should support farmers who are seeing high corn prices for the first time in years. They also say the campaign is misleading, and that ethanol makes only a tiny contribution to rising food prices. “They need a scapegoat that can justify the increase in the price of food,” says Iowa Senator Chuck Grassley. GMA has admitted that it believes oil prices are a factor in high food prices, but it believes removing government biofuel mandates is an easier goal to reach. The new farm bill extended a 54 cent per gallon tariff but reduced the tax credit to refiners who blend ethanol from 51 to 45 cents per gallon. Both provisions run only through 2010.
