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Worse than oil subsidies (continued from Page 1)

A multitude of state and federal income tax credits and deductions results in an income tax rate of less than 11% for the oil industry compared to average business taxes of 18%. A 2006 study by the Interior Department estimated that royalty-free incentives by the government allow oil companies to escape tens of billions of dollars in royalties that they would otherwise pay the government for oil and gas.

Oil subsidies aren't the worst thing.

As unbalanced as public policy is regarding non-renewable energy, it pales compared to the looming disaster being created by converting crops into ethanol. Every new ethanol project (also taxpayer subsidized) essentially takes food out of the mouths of the poor and the spectre of food shortages is already casting a shadow around the globe. Children may die while Americans and Europeans pat themselves on the back for their being "environmentally conscious".

Grain is essential to sustain human life and accounts for nearly 50% of the calories consumed by each person. In recent centuries, the production of grain has improved so much that no person in the world need go hunger. The world's grain farmers produced record crops in 2007 - more than 2.3 billion tons of grain.

Grain is also used for livestock feed, and increasing for ethanol and other fuels. Worldwide, the amount of coarse grains converted to energy jumped 15 percent to 255 million tons and food stocks are falling fast. The U.S. Department of Agriculture is predicting that supplies of on-hand stocks may fall to a 47-year by the end of this year. "The USDA projects global grain supplies will drop to their lowest levels on record. Further, it is likely that, outside of wartime, global grain supplies have not been this low in a century, perhaps longer," said NFU Director of Research Darrin Qualman.

But 2007/08 will mark the seventh year out of the past eight in which global grain production has fallen short of demand. Data and analysis from the Earth Policy Institute shows how the drive to create biofuels is accelerating the rise in food prices around the globe.

There have already been riots in parts of the world as the poor find themselves unable to buy need grains - rice, corn, and wheat. In Mexico and much of Central America, many people live on diets of mostly tortillas and beans. Now, even tortillas are becoming too expensive. The World Bank reports that for each 1 percent rise in food prices, caloric intake among the poor drops 0.5 percent.

The spectre of food shortages is casting a shadow across the globe, causing riots in Africa, consumer protests in Europe and panic in food-importing countries. In a world of increasing affluence, the hoarding of rice and wheat has begun. The President of the Philippines made an unprecedented call last week to the Vietnamese Prime Minister, requesting that he promise to supply a quantity of rice. Half of the planet depends on rice but stocks are at their lowest since the mid1970s when Bangladesh suffered a terrible famine. Rice production will fall this year below the global consumption level of 430 million tonnes. n Mexico, Morocco, Uzbekistan, Yemen, Guinea, Mauritania and Senegal. There have also been protests in Jakarta, the Indonesian capital, over government price increases.Population

If 80 percent of the 62 distilleries now under construction in the are completed by late 2008, grain used to produce fuel for cars will climb to 114 million tons in the U.S., or 28 percent of the projected 2008 U.S. grain harvest.

Congress needs to immediately roll back all subsidies on non-renewal energy production and for converting food grains into ethanol. While this won't be popular with corn growers, it will help to divert a growing food crisis. What should be a call for justice is turning out to be a hobbesian choice.

Peace,

Charlie Jackson
Texans for Peace

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