Farm leaders: Don't blame ethanol for food, fuel costs

Farm leaders: Don't blame ethanol for food, fuel costs

VILLA GROVE – Area farm leaders say that a weak U.S. dollar, growing demand for food and fuel in China and India and record energy costs – not the use of corn in ethanol – are largely responsible for the rising cost of food.

Several local farmers met Thursday with a film crew from the Japanese NHK public television network.

Jerry Watson of rural Villa Grove led the Japanese journalists on a tour of his farm to see the condition of his corn and soybeans following recent floods.

In addition, state Sen. Mike Frerichs, D-Champaign, gave the visitors from Japan a tour of other farms in the area.

Sean Ledden, an NHK producer and interpreter for the Japanese television journalists, said the crew's documentary on the American food vs. fuel debate will air on the network on July 3.

"We want to show what is happening in the United States with ethanol," Ledden said.

Champaign County Farm Bureau Manager Brad Uken said the visit helps to demonstrate the effect that East Central Illinois farming has on the worldwide economy.

"Ethanol is being blamed for higher fuel costs and higher food costs," Uken said. "But the opposite is true."

Uken cited a recent study by Iowa State University that demonstrated that ethanol caused retail gasoline prices to drop between 29 and 40 cents per gallon.

"If you drive 10,000 miles a year in a car that gets 20 miles per gallon and you pay $4 a gallon for fuel, ethanol actually saves you around $200 a year," Uken said.

Former Illinois Corn Growers Association President Roger Sy, a farmer from Newman, said the effect of agriculture on food prices is less then many consumers may think.

"Ethanol is not the root of all evil," Sy said. "With the increasing yields we've had during the last few year's, there's more than an ample supply to meet demands."

Sy said that only 10 percent of American field corn is used for human food.

Another 47 percent goes to livestock feed, 17 percent is exported, 17 percent goes for ethanol, and the rest is use for other purposes.

"When you spend a dollar at the grocery store, only 19 cents of that dollar goes back to the farmer for his share of the crop," Watson said.

The weak U.S. dollar has made American goods cheaper to foreign markets, increasing demand for corn and soybeans," he said.

"Even with record high prices here in the United States, we have already exported more corn in 2008 than we did at this time in 2007 by 19 percent," Watson said.

Compounding the problem, according to Sy, is the rapidly growing middle class in China and India.

As families in these countries are able to afford vehicles and more nutritious food, their demand for fuel and food also increased, indirectly hiking U.S. fuel and food prices.

Watson said per capita meat consumption in China has more than doubled since 1980.

"Other countries are eating more meat as their economies are getting better," Sy said.

The higher fuel prices, in turn, have affected food prices, Watson said, because fuel is needed to operate farm vehicles and to transport food from the fields to the processors and then to the grocery stores.

"Since 1949, corn prices have increased less than 400 percent, while oil prices have jumped more than 4,000 percent," Watson said.

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