NORTHWEST ARKANSAS — One out of every six people in Arkansas lives below the poverty line and cannot afford enough food to feed his family, according to the 2011 American Community Survey Census data.
The U.S. Department of Agriculture ranks the state third in the nation for the most incidences of food insecurity.
At the same time, almost half of American corn is being diverted from food and feed for livestock and burned as fuel. This plays a role in making our meals more expensive since it raises the price of our meat, eggs, milk and other foods, hitting those below the poverty line the hardest.
Consumers are not the only ones suff ering. All industries that rely on corn to produce food are impacted. For example, corn is the largest input cost of raising a chicken.
At least three chicken companies in the past year with operations in the Natural State have seen consolidations, layoff s, sell-offs to other companies outside the state or even outside of our borders.
Hundreds of jobs, including family farmers who grow chickens, have been lost in Arkansas alone because chicken companies have not been able to endure the limited corn supplies and very high, very volatile corn prices.
Yet, the equivalent of 430 million bushels of corn last year was exported to foreign countries - in the form of fuel.
What is the common denominator in thisunbalanced equation? Our federal ethanol policy has not been buying us the energy security or rural development policy-makers were hoping to achieve.
Since 2005, the federal government has set production targets for biofuels, including corn ethanol, and required gasoline producers to blend a mandatory amount of biofuel into their products under a mandate known as the Renewable Fuels Standard. Blenders rely almost entirely on ethanol derived from corn to meet the RFS.
The amount of corn used for ethanol production has risen every year, and it is set to keep rising. Our nation’s corn stocks have been dwindling, but even in tight supplies, ethanol eats corn first because of this government mandate. The USDA is relying on farmers to plant more corn this year to keep prices stable and account for the increased demand resulting from ethanol, but we cannot count on this to be the case. One major drought or heavy period of rain could significantly set back corn yields and cause prices to soar even higher.
This artifi cial market incentive and the voracious demand from the ethanol industry has caused corn prices to nearly triple since the mandate was enacted.
It is no coincidence foodand feed prices have raised steadily with it.
According to the USDA, food prices rose 4.5 percent in the United States in 2011 and are projected to rise an additional 3.5 percent in 2012. While the average American family spends 10 percent of its income on food, more impoverished Americans, the unemployed or people on a fi xed income feel the impact fi rst and hardest, because their share of income spent on food is much higher. Everyone on the planet, though, indirectly pays a tax to support ethanol production because turning corn into fuel has pushed up food costs across the globe.
Food producers and farmers in the United States, particularly those in the chicken industry, are struggling too, paying more and more for corn because of the insatiable demand from the ethanol industry that profits from a market guaranteed by law.
Too many family farmers who raise chickens under contract with poultry companies have lost, or are now losing, their contracts to grow broilers.
Disrupting or ceasing the fi nancial fl ow generated by the contract payments results in not just the broiler operations being jeopardized, but in many cases results in the entire family farm being put in jeopardy.
Urgent action is needed to protect corn stocks and alleviate pressure on the corn market. If Congress cannot muster up the political will to eliminate the ethanol mandate, it should at the very leastput in place a safety valve to adjust the RFS when there is a shortfall in corn supplies.
A bill currently before the U.S. House of Represen-tatives, The RFS Flexibility Act, would do just that. It would help to protect corn stocks for food producers and reduce global food price volatility by reducing the mandate for ethanol when corn stocks are tight, as they have been.
The entire Arkansas U.S. House delegation - Reps. Crawford, Grift n, Ross and Womack - are to be commended for their co-sponsorship of this legislation. The bill will go a long way to help ease the pressure on chicken companies, reduce global food price volatility and protect millions worldwide from falling into extreme poverty.
The production of corn is subject to a number of variables, including volatile weather, that could increase cost. While policy cannot be made on prayers for rain, Congress can and should address the RFS.
Reining in this mandate would not only help Arkansas’ struggling chicken farmers and companies, it would help those struggling to put food on tables from Arkansas to Zimbabwe.
HEATHER PAUL IS EXECUTIVE DIRECTOR OF ACTIONAID USA, A NONPROFIT GROUP THAT COOPERATES WITH COMMUNITIES WORLDWIDE TO RELIEVE HUNGER. MIKE BROWN IS PRESIDENT OF THE NATIONAL CHICKEN COUNCIL, A POULTRY INDUSTRY GROUP.
Opinion, Pages 5 on 03/05/2012