WASHINGTON, DC—The Senate Homeland Security and Governmental Affairs Committee, led by Chairman Joe Lieberman (ID-CT) and Ranking Member Susan Collins (R-ME), today held a hearing titled, “Fuel Subsidies: Is there an Impact on Food Supply and Prices?” The committee heard from witnesses who testified that the increasing price of food is causing an increase in the number of hungry and poverty stricken individuals in the U.S. and throughout the world, and that the rising demand for ethanol is likely a contributing factor in the increased price of food. The committee examined whether U.S. policy, such as that which encourages the production of corn for use in biofuels such as ethanol, should be revisited.
Witnesses explained that there are a number of reasons why food prices have increased so dramatically—such as higher food demand in developing countries, higher energy costs, and drought in Australia and the Ukraine-- but that the increased demand for corn-based ethanol is also a factor and one that could be addressed through revised government policy.
According to the World Bank global food prices have increased by 83 percent in the past three years.
Senator Lieberman said, “The confluence of events – poor harvests, reductions in exports, increasing food consumption, high oil prices, and federal ethanol subsidies - has had a dramatic impact on food prices as events spin off one another, creating a cycle of rising demand, dwindling supplies, and unstable prices. If you are poor, the effects can be deadly. The testimony today has shown that we must carefully consider the consequences of our policies, and I am committed to further examination of the causes of and solutions to higher food prices so that Congress can act in the most responsible manner for American consumers.”
Senator Collins said, “The impact of rising prices, food shortages, and export restrictions has devastating consequences for the billion people around the world living in dire poverty. But subsidies for ethanol production, tariffs on ethanol imports, and mandates for ethanol use have certainly had an impact on the U.S. corn crop and food prices. It is incumbent upon us to examine the impact that American biofuel policy is having on the global food crisis and whether our policy needs to be adjusted to mitigate unintended consequences in the United States and elsewhere.”
Witnesses included; Andrew Siegel, Vice President and Treasurer, When Pigs Fly Bakery in Maine; Dr. Bruce Babcock, Director Center for Agricultural and Rural Development, Iowa State University; the Reverend David Beckmann, President, Bread for the World; and Dr. Mark Rosegrant, Director, Environment and Production Technology Division, International Food Policy Research Institute.