The International Monetary Fund is reporting an alarming 23 per cent rise in food prices in the past 18 months and the US Agriculture Department says global grain inventories are at their lowest levels in 30 years. In the US there are currently over 100 new ethanol plants under construction.
Under normal circumstances the market would create a balance between food and fuel, but in Canada government subsidies for corn-based ethanol are warping the signals creating artificially high levels of production. The UN is worried that too much biofuel is entering the market too quickly and that the poor will become the causalities of the subsequent rising food prices.
(All cited figures and quotes are from The Globe and Mail, July 20)
