Is Ethanol Worth 100 Million Starving People?

Via Mark Thoma:

Jeffrey Sachs reports that there are 100 million more chronically hungry people in the world today as compared to two years ago. A key reason for the increase, and plausibly the main reason for the increase, is U.S. ethanol subsidies, which have diverted food grains to fuel production and increased prices of staple grains worldwide. Wolfram Schlenker and I estimate the price increase to be 22-67 percent for corn, soybeans, wheat and rice. It's hard to translate price increases into hungry people, but 100 million sounds plausible to me.

All told, there are about a billion chronically hungry people worldwide.

Sachs says poor countries might be able to produce a lot more food on their own. They just need more money to pay for fertilizer and modern high-yielding seed varieties. One would think higher prices would spur the adoption of these techniques. But they need financing, which is difficult for almost everyone these days.

Maybe addressing this problem would be a good place for the new Obama administration to "extend opportunity to every willing heart — not out of charity, but because it is the surest route to our common good. "

In light of Obama's support for ethanol subsidies, I would hope that he would at least be willing to compensate for the harm this does to the most disadvantaged people on the planet.


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