Yet Another Unintended Consequence Of Ethanol Investments

from the alternative-to-what dept

Although ethanol has been touted as a legitimate alternative to traditional energy sources, we've been intrigued by the frequent reports of "agflation", the soaring price of agricultural commodities, as a result of ethanol subsidies. It's hard to see what good it is to switch away from expensive oil and gas if the result is simply another expensive fuel that makes other goods more expensive. As the New York Times notes today, interest in ethanol has helped push the price of Midwestern farmland to new heights. This is good news if you happen to be sitting on large tracts of land that you're looking to unload. But if you're a farmer in any other business than corn, it's trouble. Small farmers are particularly hard hit. Defenders of agriculture subsidies often argue that they help preserve the farm industry and the way of life that comes with it. But as anecdotes like this show, they mainly help large agricultural conglomerates, while independent farms continue to suffer.

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