Mexico already has been significantly affected by the rising costs of corn. Because 107 million Mexicans rely on corn as their main source of sustenance, its soaring price increase has sent shockwaves throughout the country’s corn-related industries. The price of tortillas in Mexico has risen by 100%, resulting in mass protests by tens of thousands of enraged consumers last January. Recently inaugurated Mexican President Felipe Calderon stated that the price increase of corn is unjustifiable and “threatens the economy and millions of families.” In response to the strike, Calderon signed an accord that limited the price of tortillas to 8.50 pesos per kilogram, and increased the quota of duty-free corn products imported from the United States. Despite Calderon’s efforts to regulate corn prices, the situation remains unresolved, since the accord expired in May.

The rapidly changing international corn market also has affected the prices of other produce. Due to the high demand for corn, farmers in the U.S. are now planting more acres of the commodity. This has decreased the production of other crops, such as wheat, soy and rice, making them more expensive and less available. Beer prices also have risen due to the substitution of barley for corn. Even the price of meats and poultry such as turkey, chicken, pork, beef as well as eggs and dairy products are beginning to increase due to the high cost of feeding farm animals. Fidel Castro may have a point; current U.S. economic policy seems to indicate greater interest in fueling cars than feeding people.

Is Ethanol Really Better For The Environment?
In May of 2007, the United Nations issued a report warning the world against the production of ethanol. The report stated that thus far, the production of ethanol has resulted in “the destruction of endangered rainforests, contamination of soil, air and water and the expulsion of rural populations from their homes.” Because more acreage needs to be cultivated in order to produce the amount of corn, sugarcane and other foodstock needed for ethanol production, farmers around the world are wantonly cutting down forests to make way for new plantations. In the long term, the Amazon Rainforest, for example, will experience vast deforestation due to Brazil’s increased sugarcane production in order to meet its ethanol export goals. This inevitably will result in the slow degradation of one of the Americas most precious and fragile ecosystems.

The UN also added that “where crops are grown for energy purposes, the use of large scale cropping could lead to significant biodiversity loss, soil erosion, and nutrient leaching.” Fidel Castro warned the U.S. that corn-based ethanol production will not only damage the environment, but will also put increasing pressure on the world’s already dwindling water supplies, possibly resulting in future water wars.

In a COHA interview with Boston University’s International Relations professor Kevin P. Gallagher, he asserted that we have found ourselves in a “climate constrained insecure world,” where we must shift our dependence away from fossil fuels and have a more climate friendly energy policy. Moreover, Gallagher stresses that “corn-based ethanol is not a panacea to solve a country’s climate and security problems.” He emphasized that currently the U.S. has the opportunity to develop a more efficient energy path, but with its present, poorly managed corn-based energy policy, the U.S. is “taking one step forward and two steps backward.”

Gallagher also pointed out that the corn, wheat and soy sectors are highly concentrated, meaning that at times “only two or three firms can control 75% to 85% of the market.” This raises possible concerns that these firms are manipulating the price of their products, thereby artificially impacting the commodity market to their advantage, but not necessarily to society’s benefit. Because these mega-firms face so little competition, it is relatively easy for them to drive up the price of their products in order to generate greater profits. At the present time, corn-based ethanol production is benefiting mainly the larger firms.

In Mexico there are only a relatively small handful of tortilla makers whose prices, as mentioned above, have rapidly shot up. Yet it is very important to note that these tortilla prices increased somewhat faster than the price of corn in general. While the situation in Mexico is currently under investigation, its present fate illustrates the importance of rapidly addressing this issue.

It is evident that while ethanol, as an alternative to fossil fuel, may be beneficial to the general population by reducing and stabilizing fuel prices, its consequences may far outweigh such advantages. As Food Rights Coordinator Celso Marcatto at ActionAid in Brazil stated, “The benefits of biofuels cannot be achieved at the expenses of increased food shortages, environmental degradation and poverty.” Unfortunately, that is what the U.S. is inadvertently setting itself up for in the future.

Alternatives To Corn-Based Ethanol
The U.S. currently uses more energy per unit of GDP than do most other countries in the world. Yet there are many ways the U.S. could utilize its energy more efficiently. For example, steel mills in the U.S. use more energy per dollar than their equivalent in Germany or Japan. The Japanese car company Toyota is currently using its hybrid technology to manufacture more fuel efficient cars. Germany uses energy efficient light bulbs from which it derives huge savings. The U.S. needs to use the eco-technology which now exists to mirror these countries by adapting them to its own use.

Wind and solar energy, a function of geography, should be a key component in the U.S.’s quest for energy efficiency. Professor Gallagher suggests that former President Carter’s energy policy had the U.S. “perfectly positioned to, by now, be the world leader.” Yet because the succeeding administrations strayed away from Carter’s path, the U.S. is now far behind. “We have engineers and ingenuity but the current administration has locked itself into a specific framework and is resistant to change,” says Gallagher. The U.S. still has time to alter its course toward a more energy efficient arrangement. Hopefully, the White House will acknowledge its current unwise economic policy and join other governments that value the use of eco-friendly energy.