Still, there is a problem with food prices right now. They are going up, and going up quite a bit. One reason for this is the switch to biofuels due to government mandates. The subsidies for using corn for ethanol production has helped drive up the price of corn. This in turn causes people to substitute away from corn to various substitutes which are also going up in price.Verdon makes some other good points.
These factors combined are why we are seeing riots in various places around the world and also why there are signs of problems here in the U.S. Green fuel initiatives that have pushed biofuels are a big mistake.
And yet, biofuels were supposed to be good for the environment and break the grip of the OPEC oil cartel and put a dent in the petro-dollars flowing to terrorists. Nevermind that oil is at its highest price in nominal and real terms. That biofuels would lead to these kinds of problems was obvious. If biofuels were indeed a cheaper alternative to oil, then economies would have switched. I don’t care what kind of lame-brained conspiracy theory you adhere to regarding ExxonMobil or other oil companies, the switch would have occured. What this means is that biofuels are more expensive that oil as an energy source, and that forcing a switch would mean we end up worse off.
But we are still left with a situation where food prices are going up. While there is no government rationing of any sort in America, there are food shortages elsewhere.
Are we on the verge of resource conflicts? Probably not, but anytime someone steps up with a solution, think about this: Bio Fuels were supposed to be a solution for the energy crisis, but oil based fuels continue to rise in price. Which if bio-fuels were supposed to work, the supply of oil would have increased and the price decreased.
Yeah, after paying $50 for a tank of gas (just under 13 gallons) this morning, it is hard for me to see how those bio-fuels are working in my favor, in either gas or food prices.