EconTech

I’ve got to say, while I enjoy reading their posts (usually), the lack of documentation in the form of either hyperlinks or footnotes is most annoying. There is much too much reliance on their authority as respected academics on their own blog. Unfortunately, that is not even the UofChicago way, where everyone has to back their ideas and no one is free from robust criticism.

Anyway, Becker seems to think ethanol and other biofuel production and subsidies are to blame. Posner takes issue with Becker’s dismissal of Malthus. Again, numbers and sources would be good, but here’s a snip:

Rather, the boom in petroleum prices and subsidies to ethanol and other biofuels are the most important forces explaining the recent increase in food prices. Both the sharp run up in oil prices, and the continuing subsides to ethanol production in the United States, and to a lesser extent Europe, induced an increasing diversion of corn from feed and human consumption to the production of biofuels. The main goal of the diversion has been to produce more ethanol as a substitute for gasoline. During the past year, one quarter of American corn production, and 11 percent of global production, was devoted to biofuels, and the US contributes a lot to the world corn market. The growth in demand for biofuels explains why acreage was shifted from other grains to corn-the acreage devoted to corn in the United States increased by over twenty percent in 2007-8, while that devoted to soybean production declined by more than fifteen percent. The reallocation of production away from other grains explains the rapid price increases for wheat, soybeans, and rice as well as for corn.