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December 10, 2007

Another shot in food vs. fuel fight

Posted by Angel Gonzalez at 5:44 PM

An unlikely alliance of Big Oil firms and environmental activists has pooh-poohed corn-based ethanol, arguing that increased demand for the fuel is to blame for water shortages and rising food prices. The debate has picked up in recent days, as Congress mulls new legislation that would increase the mandate for the alternative fuel.

But Big Ethanol is fighting back. The Renewable Fuels Foundation commissioned a report that argues that ethanol is not to blame for the rising cost of Corn Flakes and other food staples. Most of the increase in food prices is due to higher transportation and marketing costs at a time when oil has become more expensive, the report says.

Moreover, there's no statistical link between more expensive corn and more expensive milk or eggs, says the report -- which is called "definitive" by one interested party, Pacific Ethanol. The report also argues that booming global demand for foodstuffs, coupled with a weakening dollar, adds to the pressure on food prices.

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Tricia Duryee
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