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Views from the Center


Sam Loewenberg at Politico has an interesting story that describes the odd coalition that has emerged in opposition to ethanol subsidies -- development and humanitarian NGOs, the livestock and food processing industries, and big oil. As Sam reports:

The headline-grabbing global food crisis has given the anti-ethanol crowd a rare opportunity to take up a legislative battle they thought they had lost. Industry has found an unlikely ally among several humanitarian groups, leaders of which hope that cutting back on ethanol will lower food prices.

I happen to think that Sam has got it wrong when he dismissed the impact of ethanol subsidies on soaring global food prices. He quotes my colleague, agricultural trade expert Kim Elliott as saying that the subsidies are a "red herring." Since Kim is a longtime critic of biofuel subsidies (see Biofuels Worsening Hunger and Global Warming -- So Yank the Subsidies!), I suspect that she was making the point that ethanol subsidies are only one part of a complex problem, rather than dismissing them as irrelevant. Other CGD researchers, including agriculture and rural development expert Peter Timmer and trade expert Arvind Subramanian have also argued that biofuel subsidies are an important part of the problem. (They are perhaps also one of the easier things to set right -- we can hardly tell the Chinese to eat less meat, and the Indians to drink less milk and eat fewer eggs so that we can continue feeding corn to our SUVs!)
But what interests me about Sam's piece is something else: his observation that big oil and the livestock and food processing industries, which from my point of view seem to usually get whatever they want from Congress, had decided to live with biofuel subsidies until the issue became a hot topic with humanitarian and development NGOs. There are some lessons here for those of us who work to improve the policies of the U.S. and other rich countries towards development. First, our influence really can make a difference -- even the very well-financed and powerful vested interests like food processing and big oil see the development community as a useful ally. Second, we should be alert and wary of being used by one set of special interests against another -- we should still do it when the cause is right, but with our eyes wide open.
As Gawain Kripke, the policy director for Oxfam America, said in Sam’s report: The food and oil lobbyists' timing "is opportunistic, but it doesn’t make it wrong."

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CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.