Wednesday, April 23, 2008

Walking in Darkness

Food Crisis Shows How Bad Policies Can Be Deadly

Sometimes, bad economic policies create small annoyances. Sometimes, they lead to catastrophes.

For years, the U.S. has heavily subsidized the production of corn-based ethanol. The global impact of that policy is beginning to lean toward the latter category.

There is no question that subsidies have had their desired effect: An enormous share of the grain crop is now devoted to energy production. How much? A new World Bank report states that "almost all of the increase in global maize production from 2004 to 2007 (the period when grain prices rose sharply) went for biofuels production in the U.S." Go back and read that sentence a second time. It is stunning.

Bad policies based on bad science. And we just keep marching on.

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