Wednesday, November 12, 2008

New Biofuels Group Formed

A group of American ethanol producers have come together to form a new group called Growth Energy. The backers of this group include POET, ICM Inc., Green Plains Renewable Energy and Hawkeye Energy. Their spokesman is former US House Speaker Newt Gingrich.

The organization was formed as a direct result of the Food v Fuel debate that has consumed the food and agriculture industry this year. With commodity prices now 50% less than what they were just a few months ago, many want to know why food prices haven't fallen. The Grocery Manufacturers Association, US Grains Council, the National Restaurant Association and the American Bakers Assocation have been amongst the leaders pushing the Food v Fuel debate, arguing that biofuels production has been the major increase for the price of retail food.

But with the drop in grain prices, the retail food prices have not dropped and many are now starting to question the legitimacy of the Food v Fuel debate at all.

From the GrowthEnergy press release yesterday:

The Grocery Manufacturers Association (GMA)–engineer of much of this year’s “food vs. fuel” debate–and its members face a tough choice: admit they were wrong about ethanol being the leading driver of food costs (and keep today’s high prices), or stick to their script (and lower their prices appropriately).

But this is more than a “gotcha” moment for the GMA. By exaggerating both ethanol’s impact on corn prices and corn prices’ impact on consumer food costs, GMA and its allies have distracted policymakers,the media, industry and consumers from the larger trends and challengeswe face in feeding the planet and enhancing our energy security.

It is essential that interested parties work together to address the flawed assumptions those biased calculations helped promote.

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