Agribusiness giants form ethanol-subsidy coalition

Several U.S. agribusiness companies, including processing giant Archer Daniels Midland Co., seed makers Monsanto Co. and DuPont Co., and equipment manufacturer Deere & Co. are collaborating to promote the idea that technology can ease global supply shortages in the escalating food-versus-fuel debate, Doug Cameron reports for The Wall Street Journal.

The Alliance for Abundant Food and Energy will work to protect government subsidies for ethanol production and "wants to spread its belief that renewable fuels won't cut into food supplies if new technologies, such as genetically modified crops, are used to their fullest," Cameron writes. "The Alliance for Abundant Food and Energy will underscore the role that agriculture can play in supporting our food and energy needs," says Mark Kornblan, the alliance's executive director. "It's critically important that policy leaders start thinking about how we can grow our way to a solution. Innovation is part of the American DNA -- through greater support for agricultural innovation, we can produce enough crops to supply both our food and energy needs worldwide." Read more.

The alliance will face challenges, primarily from U.S. food producers, such as Tyson Foods Inc., that are lobbying to have ethanol subsidies eliminated or reduced. "While improvements in global agriculture are vital, this work must not distract us from the fact that while we wait, millions of people will be pushed deeper into hunger and poverty because we are diverting more and more food and feed supplies to producing ethanol,' argues the Grocery Manufacturers' Association.

A 51-cent-per-gallon subsidy on corn-produced ethanol and a tariff on imports, mostly sugar-based ethanol from Brazil, are included in the current U.S. renewable-fuel policy. "My fear is that if the body politic and the general public turn their back on the first generation [of ethanol], we don't have a second generation," says J.B. Penn, John Deere's chief economist.