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Under Secretary Dorr delivers keynote address at CUTCBy Doug Rich
Ethanol, once the poster child for biofuels, has come under attack recently as food prices rise in this country. In his keynote address at the Corn Utilization & Technology Conference, Thomas Dorr, U. S. Department of Agriculture (USDA) Under Secretary for Rural Development, defended the ethanol industry. "One would think that with all of the contributions that ethanol has made to this country that it would be celebrated, but in recent weeks we have seen a substantial assault on biofuels," Dorr said. Dorr said much of the food versus fuel controversy has been orchestrated by a slick public relations campaign funded by the Grocery Manufacturers Association. Unfortunately, this attack has fallen on fertile ground. There are a number of reasons why this attack has been so successful. "Number one, any time you have substantive price increases that impact people's pocketbooks, there is immediate action to find out who is to blame," Dorr said. "Secondly, in the course of this, it has clearly impacted certain segments of the industry that use corn in ways that they had not anticipated." Dorr said the anti-ethanol talking points have been picked up hook, line, and sinker by several of the major media organizations. "Some in the media have presented the public with a highly sensationalized and one-sided and frequently inaccurate account of a very complicated and very important question," Dorr said. "It is destructive and I resent it as a farmer and as a policy person." Dorr said USDA would rather have the discussion about food and fuel, rather than food versus fuel. Dorr said he hoped these critics, in their rush for sensational headlines, would not forget yesterday's, last week's, and last month's headlines. "Biofuels are part of a whole new world of biobased products derived from agricultural and forest feed stocks," Dorr said. "It is an historic opportunity and one that is certainly worth exploring." Global food demand and rising energy costs are significant contributors to the rise in food costs, Dorr said. From 1999 to March of 2008, global food prices went up 98 percent. Dorr added that, in that same time period, the index for all commodities rose 286 percent and the index for crude oil rose 587 percent. The consumer price index has risen 4.50 percent but only .25 percent of that increase can be attributed to ethanol. "The Council of Economic Advisers said global demand for biofuels and feed stocks accounts for about 3 percent of 43 percent rise in food prices over the last year," Dorr said. "The bulk of the price increase that consumers have seen at the check-out counter is driven by other factors including the rising cost of energy." Looking at the recent attack on ethanol production, Dorr said the corn industry needs to be prepared, in the event of a short crop in the next two to three years, to deal with some very difficult publicity. An overlooked aspect in the discussion of food prices and food supply is the fundamental rise in global demand. Dorr said this is a good thing and signals economic growth and a robust growing world economy. "This is the price we pay for winning the Cold War," Dorr said. "Over 300 million people joined the world economy. This is an extraordinary opportunity." The ongoing growth in the world economy is driving demand in a more aggressive manner than most experts had anticipated. Dorr said this has caught people off guard. "Global growth is a good thing and policy to restrict this growth in one way or another is inappropriate," Dorr said. "It is important to understand that, in the long-term, it is a very, very constructive series of events." One way to diffuse this controversy would be to introduce another feedstock for ethanol production, like biomass. Dorr said no one anticipates that corn will be the sole feedstock for ethanol production. "But, without the corn milling industry producing ethanol, we would never have realized that we do have the ability to produce it on a commercial basis," Dorr said. Long-term, Dorr thinks that cellulosic ethanol will be a significant feedstock source and ultimately the primary feedstock for ethanol production. "The economic and national security of this nation depends on diversifying away from oil," Dorr said. "Ethanol is part of this core strategy and it will have significant benefits, not just for rural America but for the country as a whole." Doug Rich can be reached by phone at 785-749-5304 or by e-mail at richhpj@aol.com. 6/9/08 Date: 6/5/08
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