Just how politically sustainable is using food for fuel in the US. There’s an interesting post over on dtn Ag Policy Blog (limited trial, and limited access, I had to pretend to be Canadian) about the sustainability of the US’ Biofuel policy.
The key lines for me are
USDA Chief Economist says that the rising prices of US agricultural commodities like corn and soya “will not boost food prices enough to harm consumers.”
Their Washington insider says:
[Collins'] conclusions depend on a good harvest both this coming fall, and 2008. USDA believes that the additional acres and yield growth will provide for the growth in demand, and could even rebuild stocks a little.
The dtn Washington Insider pointed me towards Berkshire Hathaway. The investment firm recently held an annual meeting. Someone there could be the small boy in the Kings’s New Clothes by Hans Christian Andersen, its either the person who asked about ethanol or Warren Buffet’s deputy, Charlie Munger, who said, according to the Minneapolis StarTribune.com
“Running cars on corn is about the stupidest thing I ever heard of… Our government is under tremendous political pressure even though it makes no sense.”
So we have a political decision to turn food into fuel, that is uneconomic and could put one of the world’s largest countries at risk of rising food prices or worse if the weather is bad. Am I missing something, and is Charlie right? Let me know.