CBO: Ethanol policies pushed food prices higher

(By Ed Morrissey, Hot Air) - This won’t surprise anyone at Hot Air, where we’ve covered the starvation model that comes from converting food into fuel, but now we have confirmation from the Congressional Budget Office of the inflationary effect of federal ethanol policies. Not only did those policies create an increase in costs for food, that creates an even more unpleasant consequence at a time when federal revenues will decrease:

Federal ethanol-fuel policies forced consumers to pay an extra 0.5 percent to 0.8 percent in increased food prices in 2008, and the government itself could end up paying nearly $1 billion more this year for food stamps because of ethanol use, according to a new government report.

The report by the Congressional Budget Office helps answer questions raised by Congress last year as food prices shot up, and some lawmakers questioned the effects of government policies, such as the ethanol mandate.

“Producing ethanol for use in motor fuels increases the demand for corn, which ultimately raises the prices that consumers pay for a wide variety of foods at the grocery store, ranging from corn-syrup sweeteners found in soft drinks to meat, dairy and poultry products,” the CBO said.

Also, government-sponsored subsidies and mandates for ethanol to be mixed with gasoline are supposed to help foster U.S. energy independence and to cut down on greenhouse-gas emissions, but only have reduced greenhouse-gas emissions by less than one-third of 1 percent.