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A mountain of corn, destined to be ethanol
The Associated Press

A transport truck is buried under a mountain of corn headed for the ethanol production plant.

Featured Topic | Posted 30 weeks 5 days ago

With food prices soaring, should the U.S. keep subsidizing farmers?

Washington's love affair with corn-based ethanol may be cooling, but President Bush and Congress are heatedly clashing over who is to blame for delays in responding to skyrocketing gas and food prices. Bush on Tuesday defended ethanol production, saying "it's in our national interest that our farmers grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us."

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Ben likes: Big Corn and the ethanol hoax

Walter Williams/Townhall.com

Ethanol production has driven up the prices of corn-fed livestock, such as beef, chicken and dairy products, and products made from corn, such as cereals. As a result of higher demand for corn, other grain prices, such as soybean and wheat, have risen dramatically. The fact that the U.S. is the world's largest grain producer and exporter means that the ethanol-induced higher grain prices will have a worldwide impact on food prices.

It's easy to understand how the public, looking for cheaper gasoline, can be taken in by the call for increased ethanol usage. But politicians, corn farmers and ethanol producers know they are running a cruel hoax on the American consumer. They are in it for the money. The top leader in the ethanol hoax is Archer Daniels Midland (ADM), the country's largest producer of ethanol. Ethanol producers and the farm lobby have pressured farm state congressmen into believing that it would be political suicide if they didn't support subsidized ethanol production. That's the stick. Campaign contributions play the role of the carrot.

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Joel likes: Making America fat and polluted, one subsidy at a time

Christopher D. Cook/Christian Science Monitor

If the current measure passes Americans will shell out billions of dollars for farm subsidies that wreak havoc on our land and diets. These payments irresponsibly promote the consumption of cheap fatty foods, the depletion of soil and air through overuse of pesticides, and destructive farming practices.

Like farm bills past, this one also advances the removal of small farms, eroding the spirit and finances of rural communities across the U.S.

Instead of upholding these mega-farm subsidies, let's invest the public's money in sustainable growing practices, organic foods, and small and mid-sized farms that form the bedrock -- both economically and socially -- of communities throughout America's heartland.

Hardly a romantic nod to the past, such an overhaul is a practical investment in the future. As global warming heats up, we can't afford a system that guzzles 100 billion gallons of oil each year in pesticides and the long-distance transit of packaged foods. 

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Rice shortage
The Associated Press

Rice rationing at Costco in California.

Featured Topic | Posted 31 weeks 4 days ago

Will global food riots come to American shores?

AFP

Recent months have seen "food riots" around the world as short supplies and high prices have turned hunger into anger. Now Americans are getting to experience the shortages firsthand: Costco and Sam's Club this week announced they were rationing sales of rice to prevent some customers from hoarding the grain from others.

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Ben likes: Free markets are rare in starving nations

Steven Malanga/ Real Clear Markets

Political turmoil and the retreat of freedom have managed to make people hungry even in places where many previously were not. Heading the U.N.’s list of countries where people are most undernourished, for instance, is Zimbabwe. When the country became independent in 1980 it had, according to the Index of Economic Freedom, “extensive natural resources, a diversified economy, a well developed infrastructure, and an advanced financial sector,” as well as networks of productive farms. But the increasingly repressive regime of strongman Robert Mugabe has destroyed property rights, allowed favored government officials to seize control of farm lands, and been hostile to Western investment, in the process transforming the country “from the breadbasket of Africa into a starving, destitute tyranny,” according to the Index of Economic Freedom.

In many places, hunger is prevalent even though natural resources are plentiful. In the Democratic Republic of the Congo, where two-thirds of the country’s 62 million people are undernourished, citizens lived amid constant chaos after war broke out in the mid-1990s and the country became a battle ground for troops from eight nations in the so-called African World War, in which more than 5 million people died mostly from starvation and disease. Tragically but perhaps not surprisingly, despite abundant resources including copper, cobalt and diamonds, as well as “enormous agricultural potential” according to the United Nations, the DRC is one of the world’s poorest countries, where production of food has declined some 40 percent since war broke out.

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Joel likes:The Saudi Arabia of food

The Washington Independent

The United States may have been a significant part of the problem -- with its annual $6 billion in subsidies to produce ethanol from corn. But the United States is also almost certain to be part of the solution because it is to food what Saudi Arabia is to oil: the swing producer that can most easily and swiftly increase the world’s food supply.

The United States remains the world’s breadbasket. It produces slightly more than 30 percent of the world’s wheat exports, about 70 percent of the world’s corn exports and close to 40 percent of its soybean exports. Food exports, at nearly $70 billion, are one of the biggest earners from foreign trade, well ahead of chemicals or general machinery or aircraft.

The flexibility of U.S. farmers to switch crops in response to market signals is the reason not to panic, despite grim news pictures of food riots in Haiti and Egypt and signs of panic in the Philippines.

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Food protests
The Associated Press

A food protest in the Phillippines

Featured Topic | Posted 33 weeks 1 day ago

Could food prices destabilize governments around the world?

Haiti's Senate has voted to fire that country's prime minister in the wake of fatal food riots there. And the problem is widespread: Egypt's authoritarian regime faces a mounting political threat over its inability to maintain a steady supply of heavily subsidized bread to its impoverished citizens; Cote D'Ivoire, Cameroon, Mozambique, Uzbekistan, Yemen and Indonesia are among the countries that have recently seen violent food riots or demonstrations. How to resolve the crisis of rising food prices around the world?

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Ben likes: Farm this out

Deroy Murdock/National Review

Washington cannot control inflationary factors like petroleum prices or Chinese and Indian food demand. But ethanol mandates, subsidies, and import tariffs are within Uncle Sam’s grasp, and farmers are benefiting from the federal corn-ethanol bonanza.

In short, Congress shakes down taxpayers (many in foreclosure) for $286 billion to subsidize farmers already in cornucopian bliss. Their record crop prices, in turn, fatten supermarket and restaurant tabs, which squeeze taxpayers’ wallets yet again. Frightfully, these factors stir Third World hunger and chaos.

If this were Bourbon France, citizens would be at Versailles’ gates, justifiably screaming for justice.

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Joel likes: The world food crisis

New York Times

Last week, the president of the World Bank, Robert Zoellick, warned that 33 nations are at risk of social unrest because of the rising prices of food. “For countries where food comprises from half to three-quarters of consumption, there is no margin for survival,” he said.

Washington provides a subsidy of 51 cents a gallon to ethanol blenders and slaps a tariff of 54 cents a gallon on imports. In the European Union, most countries exempt biofuels from some gas taxes and slap an average tariff equal to more than 70 cents a gallon of imported ethanol. There are several reasons to put an end to these interventions. At best, corn ethanol delivers only a small reduction in greenhouse gases compared with gasoline. And it could make things far worse if it leads to more farming in forests and grasslands. Rising food prices provide an urgent argument to nix ethanol’s supports.

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French Fries
Flickr user bunchofpants

Will they be healthier?

Featured Topic | Posted 37 weeks 3 days ago

Banned in Boston: Trans fats

Put down that french fry.

Boston health regulators this week approved a ban on artery-clogging trans fat in restaurants and grocery stores, similar to a ban instituted in New York City. The first phase of the ban goes into effect in September and will apply to the use of cooking oils, shortening and margarine that contains artificial trans fat. The makers of baked goods will have a year to eliminate trans fat from their products.

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Ben likes: Anatomy of a scare

Elizabeth M. Whelan/The American

The New York City Health Department's regulatory move appears to mark the first time a health agency has taken action against safe, legal foods -- in this case, certain margarines and cooking oils -- instead of disease-causing organisms. The regulatory demonization of trans fats and the underlying "trans-fat-phobia" reveal a good deal about how the media and consumers react to a health scare, how scientists respond (or do not), and what lies ahead for other food ingredients.

Most of the trans fats in our diet are derived from man-made partially hydrogenated vegetable oil (trans fats also occur naturally in beef, lamb, and dairy products). In recent years, trans fats have accounted for about 3-4 percent of our total calorie intake, but given the food industry's race to get trans fats out of many foods, the percentage of our total calories today that is trans fats is probably more like 1-2 percent.

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Joel likes: Big Apple no longer Fat City

Q&A with Marion Nestle/Salon

This is a situation in which you have a demonstrably harmful substance that eliminating will make absolutely no difference whatsoever to anybody's experience. Why wouldn't the city want to get rid of something that's harmful? It won't taste any different. It won't cost any more. Nobody will notice it.

People have to wear seat belts. You can't smoke on airplanes. This is in the same category, but this is one that nobody is going to notice. Because it makes absolutely no difference, except to health. And it's the best kind of public health intervention, because it's one that people don't have to think about.

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High price of bread in 2008
The Associated Press

Bread prices are rising, along with other commodity prices.

Featured Topic | Posted 37 weeks 6 days ago

Supermarket sticker shock: What to do about rising food prices?

Bread prices have been rising for awhile. So has the price of corn, milk, meat and poultry. Now coffee prices are going up... again. A weak U.S. dollar that makes imported coffee more expensive and speculative investments in all commodities, including raw (green) coffee, wheat, oil and platinum, have sent prices skyward.

What should policymakers do to stabilize food prices? Can government ease the pain at the checkout counter?

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Ben likes: Restore the dollar and change will follow

Larry Kudlow/Investor's Business Daily

The worldwide commodity boom in oil, metals and food is largely a function of the global spread of free-market capitalism and unprecedented international economic growth -- especially among emerging-market economies in China, India, Brazil, Russia and Eastern Europe.

Yet because the U.S. has neglected its currency, letting it drop lower and lower, good news on global growth is translating into bad news on U.S. inflation. Inflation is the single biggest cause of recession, and it may well be tipping the U.S. economy into negative territory. It's also the cruelest tax of all. Inflation robs consumer and wage-earner purchasing power. It erodes business profits. And the falling greenback is becoming a symbol of American decline. Folks are making fun of the dollar. Our enemies around the world are pointing to the unreliable dollar as evidence of American weakness.

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Joel likes: A global need for grain that farms can't fill

David Streitfeld/New York Times

Many factors are contributing to the rise, but the biggest is runaway demand. In recent years, the world’s developing countries have been growing about 7 percent a year, an unusually rapid rate by historical standards. The high growth rate means hundreds of millions of people are, for the first time, getting access to the basics of life, including a better diet. That jump in demand is helping to drive up the prices of agricultural commodities.

“Everyone wants to eat like an American on this globe,” said Daniel W. Basse of the AgResource Company, a Chicago consultancy. “But if they do, we’re going to need another two or three globes to grow it all.”

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