Ethanol as Biofuel

Today’s production of corn in the US destined to become ethanol accounts for over 25 percent of the traditional food/feed crop. That shift over the last two years has caused a dangerous increase in the price of corn, negatively impacting the growing but still fragile economy in Nicaragua.

Food As Fuel

Since corn is now seen an alternative fuel source, the agricultural commodity is now economically linked to the price of crude oil.

  • Barrel price in 2006 – $66.00
  • Barrel price today – $129.00
  • Projected year end price – $200.00
  • Bushel of Corn in 2006 – $2.00
  • Bushel of Corn Today – $6.00
  • Projected year end price – $8.62

Due in part to the negative economic impact from U.S. subsidized corn imports and recent soaring prices in gasoline, Nicaragua is facing some serious food shortage problems.

How does this effect the poor in Nicaragua? There are two results that are predictable, the first is social unrest. The World Bank estimates 33 countries face social unrest because of soaring food and energy prices. As Bob Marley once sang, “A hungry mob is an angry mob.”

The other expected consequence is increased emigration to the U.S.. According to a report today on China Radio International,

  • “63.3 percent of Nicaraguans are inclined to seek jobs in other countries, up from 55.5 percent at the end of 2007…”
  • Of those intending to seek jobs abroad, 44.5 percent prefer the United States.
  • About 42 percent of respondents said the main reason for seeking jobs abroad was the lack of jobs domestically, while 23.6 percent cited poverty as the cause and 17.1 percent said the rise in food prices was triggering the exodus.

Food that should feed people is being converted to satiate the worlds hunger for gasoline, that’s just wrong.

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