Understanding the impact of bioethanol on food prices
Overview of the production of ethanol biofuel in the United States.
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Transcript
Iowa - corn fields as far as the eye can see. These are America's new oil fields. And this is the raw material with which Americans hope to free themselves from dependence on the Arabian oil cartels. Kernels of corn.
This facility that processes the grain much like a brewery, produces bioethanol. Government subsidies ensure ever more fields like these are planted, helping replace traditional car fuel. Larson Dunn runs this ethanol production facility, one of Iowa's most modern. A number of corn farmers own a share of the facility and that's a good investment. Bill Causer, a corn farmer, is one of the big winners of the ethanol boom. He keeps planting ever more corn fields.
Legislation has been passed aimed at increasing ethanol production by 600 percent over the next 15 years. A 51 percent subsidy on the gallon - which is about four liters - makes it profitable for filling stations. Iowa's pigs now have to share their staple food with car drivers. And this continues to drive the price of corn feed higher and higher. The skyrocketing prices of meat and vegetables are forcing consumers to dig deeper and deeper into their pockets to feed themselves. Because ethanol production here also drives the price of corn on world markets, people in underdeveloped countries are suffering the most. According to an expert study from the World Bank, ethanol has increased the price of some foodstuffs by 75 percent; other experts estimate an increase of at least 30 percent. And ethanol isn't even particularly environmentally friendly. The production process requires lots of water and lots of energy. From fertilization to distillation, it takes as much or more energy to produce bioethanol as the process yields.
This facility that processes the grain much like a brewery, produces bioethanol. Government subsidies ensure ever more fields like these are planted, helping replace traditional car fuel. Larson Dunn runs this ethanol production facility, one of Iowa's most modern. A number of corn farmers own a share of the facility and that's a good investment. Bill Causer, a corn farmer, is one of the big winners of the ethanol boom. He keeps planting ever more corn fields.
Legislation has been passed aimed at increasing ethanol production by 600 percent over the next 15 years. A 51 percent subsidy on the gallon - which is about four liters - makes it profitable for filling stations. Iowa's pigs now have to share their staple food with car drivers. And this continues to drive the price of corn feed higher and higher. The skyrocketing prices of meat and vegetables are forcing consumers to dig deeper and deeper into their pockets to feed themselves. Because ethanol production here also drives the price of corn on world markets, people in underdeveloped countries are suffering the most. According to an expert study from the World Bank, ethanol has increased the price of some foodstuffs by 75 percent; other experts estimate an increase of at least 30 percent. And ethanol isn't even particularly environmentally friendly. The production process requires lots of water and lots of energy. From fertilization to distillation, it takes as much or more energy to produce bioethanol as the process yields.