(March 26, 2008) – The law of unintended consequences strikes again. The U.S. mandated ethanol requirements have forced a huge spike in corn, grain and meat prices; they have done tremendous damage to the poorest people in the world. Read the latest example here, Rice Prices Forcing Cuts in Refugee Aid.
Soaring rice prices on world markets and a battered U.S. dollar are forcing cuts in already meager food aid to more than 140,000 refugees who have fled military-ruled Myanmar into Thailand.
Part of a surge in worldwide food prices, rice has increased by 50 percent in the past two months and some experts predict further hikes of up to 40 percent. Meanwhile, the U.S. dollar continues to slide against the Thai baht currency. (Tell me that’s not embarrassing.)
If the gap is not filled, refugees could be issued with just 26 pounds of rice a month and no other food items – less than half of their daily protein and calorie needs, he said. Nursery school feeding and health projects would have to be slashed or terminated.
The irony, as I wrote about recently, is that on net ethanol increases CO2 levels and uses more fossil fuel than it saves. Unfortunately, it has now become a political institution as members of Congress wrestle for subsidies and mandates.
There is a serious energy problem. This is not the right way to solve it. In addition to the obvious moral issues, hungry people are very hard to get along with.
Starving people is not good policy, regardless of your political views.