How Biofuel Killed

This is a story about a kind of butterfly effect. You might ask how a program to produce ethanol in the United States could trigger the civil unrest in Tunisia that led to the revolutions of the Arab Spring? So here is how it all played out: It started in farm states in the good old USA where farmers wield inordinate political power and used their clout to persuade America's politicians from both political parties at mainly the Federal level (but with some cajoling at the state level) to require the production of ethanol to prop up the price levels of grain, particularly corn, and in so doing, to supposedly reduce our dependence on foreign oil and in so doing, to keep gasoline prices low (which in the event looking at four dollar per gallon gas, obviously did not happen). But what it did do was warp the market. We had grain that should have been food for people or at the very least animal feed turned into a fuel blend that only was feasible to produce because of government subsidies. Did ethanol produce price stability in corn or grain? No, prices have soared only enriching farmers and corporate farmers at the expense of everyone else at home and abroad. Because corn was now being sold at a price artificially inflated by the hand of government rather than the invisible steadying hand of the market, the cost of other staple crops also rose as demand to supplant the more expensive corn rose as a consequence. Now in the markets across the Arab world, in the food stalls, the prices of every item by necessity went up. Food was becoming more scarce and less affordable, and soon you had riots in the street. There were certainly local factors- police brutality, overt government and police corruption- but what began distorting food prices was efforts at price support and government subsidy to farmers, in the developed world, particularly the United States. And now, we and the world must contend with the bloody fallout of a little political manipulation as a sop to farmers.