May 9, 2008

US corn production for biofuel under sharp scrutiny

The US programme to subsidize the use of corn for fuel ethanol production was once again criticized during a senate hearing on Wednesday.

US economists reiterated that the programme triggers higher food prices.

Worldwide, corn prices have risen by around 50 percent over the past year. Senator John Sununu said that corn prices have been rising in part due to the increasing amounts of corn used for fuel.

Sununu pointed out that the programme ensures that both farmers and ethanol producers receive tax breaks from the government.

Imports of cheaper sugar-based ethanol on the other hand are blocked by high tariffs, he added.

David Beckmann, the president of an anti-hunger agency, says US farm subsidies should be abolished to bring down food prices.

Both Beckmann and Sununu spoke at a hearing of the Senate Homeland Security and Governmental Affairs Committee.

Other experts said that ending the ethanol programme could reduce corn prices by about 15 percent.