Around the world, food insecurity is on the rise. Families from Senegal to Arkansas are struggling to afford enough food to eat. They're facing impossible choices: use their limited funds to buy food or use them to buy other basic needs, like medicine.
And as cereal prices reach record-high levels, it's getting worse. A global food crisis is coming – but we can stop it.
As the world’s largest exporter of corn, wheat and soy, the US is a huge driver in global food prices. Because of the worst drought in over 50 years, our harvests this year are expected to be bad – driving supply down and demand up, forcing global food prices to rise higher and higher.
Despite this, the Environmental Protection Agency (EPA) requires that a large portion of our corn crop to be used not as food but to produce ethanol, an additive in gasoline. Last year, 40% of the corn produced in the US ended up burning up in our gas tanks.
Waiving the corn-ethanol mandate will lead to an estimated 7.4% drop in global corn prices and is anticipated to lower prices for meat, eggs, diary, and more. For the one billion people on the planet who wake up and go to bed hungry, even this modest decrease in prices could make all the difference.
The EPA needs to hear from you by October 11. Will you speak up today? Tell the EPA: Waive the corn-ethanol mandate so the world can afford to eat.
- EPA Administrator
As a concerned citizen and a supporter of Oxfam America, I am writing in support of the recent requests made by the Governors of North Carolina and Arkansas seeking a waiver of the biofuel mandates for corn-based ethanol.
Current mandates requiring 13.2 billion gallons of corn-based ethanol to be blended into fuel in 2012 and 13.8 billion in 2013 have been a driving factor in increased prices for corn and other agricultural commodities. The mandate for corn-based ethanol carries real negative economic consequences, particularly for poor people in the US and around the world.
I urge you to use your authority to immediately waive the biofuel mandate.
In 2011, roughly 40% of the US corn crop was used in ethanol production. The Renewable Fuel Standard mandate for corn-based ethanol was a key driving factor in the increasing use of corn for fuel, increasing demand and driving food prices dramatically higher. Using the FAO Food Price Index, researchers at the New England Complex Systems Institute have found that "corn ethanol is likely to be responsible for the underlying increase in the cost of food" during 2008-2011.
Global food prices are soaring to record-breaking levels. Demand for corn-based ethanol resulting from the mandate will continue to drive up the price of corn as well as soybeans and wheat. As a result of the worst US drought in 50 years, weak harvests will exacerbate the situation. In the last two months, the UN Food and Agricultural Organization reported record global grain prices, shooting up 38% since June.
For poor people in developing countries, who spend up to 75% of their meager income on food, any increase in food prices can wreak devastating consequences. And poor people here at home are also likely to suffer. That is undoubtedly why the Governors of North Carolina and Arkansas -- ranked the 38th and 42nd among US states in terms of percentage of the population living in poverty -- have demanded immediate action to avoid a food prices crisis. Just this month, the USDA announced that 14.7% of the US population reported being food insecure on average over the last three years, with some of the highest rates of food insecurity in Arkansas at 19.2% and in North Carolina at 17.1%.
Hunger in the US carries real economic consequences. Due to increased healthcare costs resulting from poor diets and health, lost educational opportunities and increased spending by domestic charities to provide needed support, conservative estimates find that hunger cost North Carolina $5.44 billion and Arkansas $2.03 billion in 2010. These substantial economic costs of food insecurity are caused in no small part by higher food prices.
This sharp rise in food prices is a threat to the economic and human well-being of people not just in the United States, but around the world. According to the World Bank, sudden and sharp increase in food prices in 2010 drove an estimated 44 million people into poverty.
Humanitarian relief and development agency Oxfam America has documented the struggles of people affected by high food prices. Hunger in the developing world is especially high among smallholder food producers, many of whom rely on market purchases to meet basic food needs. Those living on under $2 a day are highly vulnerable to price spikes that make food unaffordable or force difficult choices between getting enough to eat and meeting other basic needs. Amidst such vulnerability, any global food price hike will spell terrible consequences for millions.
In the Sahel region of West Africa, more than 18 million people are currently struggling to emerge from the threat of hunger due to a toxic mix of high and volatile food prices, poor harvests, chronic poverty and vulnerability. Several of the countries affected by the current crisis, Senegal and Mauritania in particular, could face a double-shock if prices increase and remain high. Senegal is one of the largest importers of corn in the West Africa region and corn contributes approximately 10%of the calories in the Senegalese diet. Food prices in the region are now up to 60% higher than the five year average.
As fundamental supply and demand factors continue to buoy food prices, waiving the ethanol mandate is key to reducing the price of corn. According to estimates, waiving the biofuel mandate will lead to a 7.4% drop in corn prices and is anticipated to lower prices for basic grains and animal products like meat, eggs and diary. This small but important decline in prices will reduce food price pressures and contribute to a more stable global environment for agricultural trade. For the one billion people on this planet who wake up and go to bed hungry, this modest but important decrease could make all the difference.
I support the waiver request submitted by the Governors of Arkansas and North Carolina, and I urge you to act quickly to relieve critical pressure on domestic and global food prices.
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