Cheat-Seeking Missles

Saturday, April 26, 2008

A Vote To Watch

Texas Senator Kay Bailey Hutchinson is readying a bill for Senate consideration that would freeze US biofuel mandates at their current level, ending the mandated increases in biofuel production through 2030.

The reason for Hutchinson's bill -- a bold one, given the amount of grain production in Texas -- is simple: Artificial, government-set mandates for biofuels are a key component of food staple price increases that have driven people to hunger around the world. Writes Hutchinson in IBD,
Nearly all our domestic corn and grain supply is needed to meet this [biofuel] mandate, robbing the world of one of its most important sources of food.

We are already seeing the ill effects of this measure. Last year, 25% of America's corn crop was diverted to produce ethanol. In 2008, that number will grow to 30%-35%, and it will soar even higher in the years to come.

Furthermore, the trend of farmers supplanting other grains with corn is decreasing the supply of numerous agricultural products. When the supply of those products goes down, the price inevitably goes up.

Subsequently, the cost of feeding farm and ranch animals increases and the cost is passed to consumers of beef, poultry and pork products.

Since February 2006, the price of corn, wheat and soybeans has increased by more than 240%. Rising food prices are hitting the pockets of lower-income Americans and people who live on fixed incomes.
The UN has called the current situation a global food crisis, and this time they just might be right.

So let's see what happens to Hutchinson's bill. Two predictions:

First, despite the extremely negative fall-out of yet another poorly conceived government mandate, the farm lobby can be expected to fight it.

And second, the obvious companion piece to this legislation, opening up North Slope lands for production, will go nowhere.

Hutchinson begins her piece with a quote that's a good wrap-up for this post:

"One of the great mistakes is to judge policies and programs by their intentions rather than their results." -- Milton Friedman

hat-tip: RCP

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