What if United States domestic policy was helping fuel food riots and higher costs around the world? There was a small Ethanol Subsidy in Iowa for several years. You could buy Ethanol-blended gas (89 Octane) for less than 87 Octane Regular Unleaded gas. In the last couple of years, the idea of Biofuels has caught on and we are now saddled with a much larger subsidy.
As a result, the price of Corn has gone from approximately $2/Bushel to a high near $6/Bushel. This price increase means farmers are now more inclined to grow Corn for Ethanol Production, than say Corn for Consumption or Feed. This is only part of the problem that the media is starting to examine. Increased demand and Weather-related incidents are making for a perfect storm of storages in basic food stuffs. Check out Dan Froomkin's round-up here. We are paying the price for not developing this technology sooner. Brazil started its research after The Arab Embargo in the '70s.
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