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In a statement this week, trade body Grocery Manufacturers Association (GMA) said America's biofuels policy must be pursued "thoughtfully and deliberately", taking into full account all possible effects of a sharp increase in the use of corn for fuel.
"We support policies that will permit an increase in biofuels production without hampering the ability of the food industry to provide consumers - both in the US and around the world - with a reliable and affordable supply of food," said Cal Dooley, GMA president and chief executive officer.
Food processors and biofuel producers now increasingly compete in the same commodity markets. There was 251 million gallons of biodiesel in 2000, which more than tripled to an estimated 790 million gallons in 2005. And in the next ten years, President Bush's proposal would increase the use of alternative energies, including biofuels, cutting gasoline usage by 20 percent.
The growth of ethanol production has undoubtedly contributed to rising crop prices, with knock-on effects for the food sector. Maize - the biggest crop in the US - is important to meat and poultry producers as well as to food and drinks makers.
Some commentators predict that this trend will put immense pressure on future food prices. Indeed, cereal prices - particularly wheat and maize - have already reached levels not seen for a decade, and the FAO has predicted that the use of crops for fuel will continue to maintain high prices. The recent enthusiasm for biofuels has also helped maize prices in the US to double in just over a year to about $4 a bushel.
In addition to its inflationary impact, there are a number of other unintended, but nonetheless important, consequences of an ambitious corn ethanol strategy, according to GMA.
"At a time when the food industry is working with international, federal and state experts to reduce the use of trans and saturated fats used for cooking and baking, a rapid increase in the number of acres dedicated to corn would negatively affect our ability to provide the public with healthier alternatives. Acres currently used to grow soybeans and other crops that produce healthier oils would instead be used to grow corn," said Dooley.
In addition, the industry body claims that an aggressive ethanol mandate will require the US to reduce its corn exports, ensuring an adequate supply of corn for food and fuel.
"Such a reduction will result in a decrease in the amount of food available overseas, which in turn will have a negative affect on world hunger," it said.
GMA also highlighted a recent Stanford University study that warned that an increase in the use of ethanol might result in more respiratory-related deaths and illnesses.
"We urge Congress and the Administration to undertake a comprehensive study that evaluates the full impact - including any and all unintentional consequences - of expanding the use of biofuels. Such a study will enable policymakers and the public to make fully informed decisions when it comes to our nation's energy policy," said Dooley.
The association said it supports a broad-based approach to alternative fuels. This includes the increased use of cellulosic ethanol, the elimination of the fifty-four cents per gallon tariff on ethanol imports and the expiration of the taxpayer-funded fifty-one cents per gallon ethanol subsidy.
"The adoption and implementation of these proposals will encourage further diversification of our nation's energy supply, restore predictability and balance to the corn market and maintain the ability of the food industry to provide its consumers with reliable and affordable food."
