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By Mike Ramey**

Agricultural, environmental and food industry groups in the US are urging the federal Environmental Protection Agency (EPA) to scale back the production of bio-ethanol this year, in light of the soaring cost of food exacerbated by recent severe flooding in the Midwest.**

The flooding of “America’s grain bowl” threatens not only to send food prices still higher, but is also increasing the price of ingredients such as high fructose corn syrup (HFCS), used by many US soft drinks producers to sweeten their products. Earlier this month, PepsiCo CEO and Chairman Indra Nooyi urged the US Government to curb the seemingly inexorable rise of commodity costs.

One contributory factor to the increases is the diversion of grain to bio-ethanol production under the so-called “food-to-fuel” policy. The EPA is currently considering a formal request from Rick Perry, Republican Governor of Texas, to reduce this year’s Renewable Fuel Standard (RFS) by half.

The RFS calls for 9 billion gallons (34 billion litres) of ethanol be blended into America’s fuel supply in 2008. However, a new study to be presented to the EPA on Monday (23 June) claims that increased bio-ethanol production has only a small effect on fuel prices, but a massive impact on food and ingredient prices.

Dr Thomas Elam of FarmEcon, an agricultural and food industry consultancy, is one of a number of experts who are backing the study. * Negative effects* “It is clear that while America’s ethanol mandate has done little to hold down the steadily-climbing gasoline prices, its negative effects on the security of our food supply and the cost to feed our families are huge,” Dr Elam said during a conference call with journalists.

“In light of recent events, it is imperative that the Government re-examine and reduce these mandates. We are facing tighter and tighter supplies of grain that threaten to devastate meat, dairy and poultry producers, and cause food price increases for the American consumer. The Government must not allow this to happen.”

Other participants in the conference call also expressed concern about the potential environmental damage of increased ethanol production.

“This year’s 9 billion gallon RFS mandate will cause an estimated 100 million tons of soil erosion, and put 300,000 tons of nitrogen fertiliser into Midwestern waters,” said Richard Wiles, Executive Director of the Environmental Working Group (EWG), a non-governmental research organisation based in Washington, DC.

“Thanks largely to the ethanol mandate and an excessively wet spring, pollution levels in the Gulf of Mexico are expected to reach record levels, with a dead zone the size of Massachusetts. That’s a high environmental price to pay for a bio-fuels policy that is straining family food budgets for the poorest Americans, and is doing next to nothing to lower gas prices.”

The EPA must issue a decision by 24 July on Governor Perry’s call to cut this year’s bio-fuel production target.