Anyone who’s visited a supermarket recently knows that the cost of food — even the most basic staples — is on the rise. In recent months, retailers and restaurants have seen dramatic increases in food prices, which in turn force them to either absorb these ever-increasing costs or pass them on to the consumer.
The Bureau of Labor Statistics reports that food inflation is rising by 4.9 percent, and other studies predict that food inflation could increase by 7 to 8 percent in the next few years. Although many factors have contributed to high food costs, food-to-fuel mandates and subsidies are significant factors that should be reconsidered in light of changing circumstances and science. It makes no sense that we have congressional mandates in place that are adding to the problem unnecessarily.
The ongoing and growing diversion of corn and soybean oil into our fuel supplies places upward pressure on commodity prices and food prices in general. According to the U.S. Department of Agriculture, 25 percent of America’s corn crop was diverted to produce ethanol in 2007, and 30 to 35 percent of our corn will be diverted in 2008. As a result, corn prices have doubled in the last two years, driving up the cost of basic staples such as eggs (69 percent), milk (22 percent), beef (10 percent) and chicken (12 percent).
The rising cost of food prices are falling most heavily on our state’s lower- and middle-class families. As chairman of the Food Dealers Council of the Maryland Retailers Association, I am well aware of the troubling number of businesses in the state struggling to stay afloat and resist cutting jobs. At a time when Maryland is experiencing a recession and thousands of families are simply trying to make ends meet, it makes little sense to artificially inflate the prices of food. We should not be relying on fuels that require food as a feed stock.
The Energy Independence and Security Act of 2007 directs refiners to blend 15 billion gallons of corn ethanol and 1 billion gallons of bio-diesel into the nation’s fuel supplies by 2015. Fortunately, Congress recognized that diverting more than 30 percent of our corn crop and our vegetable oils into our fuel supplies could affect food prices and therefore gave states the power to petition the Environmental Protection Agency for a waiver in the case of severe economic harm.
Despite the EPA’s disappointing and just-announced decision to refuse Texas Gov. Rick Perry’s waiver request, a number of other states are currently considering filing similar petitions. Maryland should take advantage of Congress’ foresight in establishing a waiver process and join them in doing so. Such a waiver would allow us to reformulate gasoline to meet the same standards without the use of ethanol — and give us a chance to immediately reduce food prices and, more importantly, avoid the certainty of much higher food prices in 2009.
WEB EXTRA
Learn more, click these links.
• The U.S. Department of Energy Alternative Fuels & Advanced Vehicles Data Center
• The Heritage Foundation
Rob Santoni’s family has owned and operated Santoni’s Super Market in Baltimore for 78 years.
