Bush administration biofuel confusion

How much do energy crops contribute to food price hikes? Depends how you count

Published June 25, 2008 2:40PM (EDT)

How the World Works loves the smell of dueling Bush administration economists in the morning. The Wall Street Journal reported on Wednesday that, according to testimony from USDA chief economist Joseph Glauber, biofuels account for ten percent of global food price rises. That, notes the Journal, is sharply higher than the 3 percent number Bush administration officials are fond of citing, based on estimates provided by Edward Lazear, the head of Bush's Council of Economic Advisers. Since Glauber's boss, Secretary of Agriculture Ed Schafer, was bandying about the 3 percent number as recently as an international food security summit held in Rome just three weeks ago, the difference is a little embarrassing.

The explanation? Glauber says Lazear's numbers don't include the effect of biodiesel made from soybeans.

In the past year the price of soybeans, one of America's biggest crops, has soared as more of the beans were used for biodiesel and since fewer acres of beans were planted last year to accommodate more acres of corn for corn-ethanol. Soybeans, soybean oil and soybean meal are ubiquitous in the food chain, found in everything from livestock feed to packaged food to tofu

Worth noting: If one goes back and reviews testimony from Lazear and statements from Schafer one finds that both men were very careful to confine their "3 percent" references specifically to the impact of corn-based ethanol. They did not use the more general word "biofuels." So there's some plausible deniability for the Bush administration to fall back on.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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