Government: 22% of Corn Goes to Ethanol

According to the US Department of Agriculture, 22 percent of corn is expected to be used for ethanol production driving up food prices 20 percent, reports MSNBC.

Of course, the ethanol industry is crying foul. They estimate ethanol production is only driving up food prices 4 percent. Both farmers and ethanol execs were in Washington this week trying to explain "the biofuel industry is not the culprit behind skyrocketing corn and wheat prices that have set off riots abroad and grocery sticker shock in America." They warn, "We cannot afford to jettison the promise of biofuels due to this manufactured hysteria over a fight between food versus fuel."

And they're right. We can't afford to jettison the promise of biofuels. But we should jettison the promise of converting food (corn, wheat) into fuel.

Pound360 has been grumbling about this for months. And others, including Republicans in Washington are starting to grumble with us. According to MSNBC, Arizona Republican Jeff Flake "called for a repeal of government incentives designed to boost ethanol production." Not only that, Flake took the first step towards really fixing the problem: he admitted we were simply wrong in the past. He called public policy support for ethanol "a classic case of the law of unintended consequences."