Ethanol not the main cause of food price hikes

The increased use of ethanol accounts for only 10-15 per cent of the rise in food prices in the 12 months before April 2008, according to the U.S. Congressional Budget Office (CBO).

Much of the rest of the cost is due to higher transportation costs, the study says. Food prices rose by more than five per cent in 2008, four per cent in 2007 and 2.5 per cent in 2006.

The non-partisan Budget Office examined the relationship between increasing ethanol production and rising food prices. In particular, it analyzed how much the increase in prices might raise federal expenditures on food assistance programs.

Better Farming - JuneJuly 2009