Americans should understand that this year’s drought—the worst in 50 years—isn’t the primary reason for record-high food prices. The drought made things worse, but the leading driver of long-term increases in food costs is a deeply flawed federal mandate.
In 2005, Congress enacted the Renewable Fuel Standard to mandate the use of corn-based ethanol in gasoline. The cost of food commodities immediately began to rise. As a result, Americans have had to deal with some of the highest food prices on record. While the drought will end at some point, the price increases caused by the ethanol mandate will continue unless the government reverses course.
(For more, see: Fast food industry dishes RFS scare tactics)
Under the federal mandate, Americans must use 15 billion gallons of ethanol in gasoline annually by 2015. To meet this goal, 5.3 billion bushels of corn per year—equal to more than 40% of the 2011 corn crop—must be processed and burned as ethanol, not used for food or livestock feed.
For more, see: A Mandate to Raise Food Prices