Food group plans to lead campaign against crop-based fuels

Wednesday, June 4, 2008 | 3:27 p.m. CDT; updated 4:24 a.m. CDT, Saturday, July 19, 2008

ST. LOUIS — The rhetoric is set to heat up this summer over the use of crop-based fuels such as ethanol, as a number of activist groups will protest biofuels as a key reason for rising food costs. While the voices might be many, the source behind them is a single food lobbying group.

The Grocery Manufacturers Association plans a high-profile campaign against biofuels that will draw together diverse groups such as hunger-prevention advocates and environmental activists. Documents leaked to the media this month show the GMA has hired the high-end Washington lobbying firm Glover Park Group to coordinate the campaign.

Farm state senators — from Iowa’s Charles Grassley to Missouri’s Kit Bond — are crying foul. They say food companies should support farmers who are seeing high corn prices for the first time in years. They also say the campaign is misleading, and that ethanol makes only a tiny contribution to rising food prices.

“They need a scapegoat that can justify the increase in the price of food,” Grassley said. “Raising the price of food is traumatic.”

GMA spokesman Scott Openshaw said the group wants Congress to revisit its support for the biofuels industry, although he agreed with Grassley that ethanol isn’t the only factor driving up food prices. There are also droughts, export bans, and rising transportation costs to blame.

“What we’ve said is that unfortunately, Congress can’t control any of those,” Openshaw said. “But the one thing that Congress can control and Congress can have an impact on is the food-to-fuel mandates.”

The grocers’ spat over ethanol mandates — which require the U.S. to use billions of gallons of renewable fuel annually — reflects a division that is deepening within the world of agribusiness lobbying. While farm and food interests were able to pass a veto-proof farm bill this year, different groups have been at odds over the use of biofuels.

On one side are grain growers, represented by lobbying outfits such as the National Corn Growers Association. Farmers have seen prices for their crops climb for the first time in years because of growing demand from ethanol and biodiesel plants since Congress mandated renewable fuel use in 2005.

Rising grain prices have put a pinch on meat producers, whose biggest cost is feed for chicken, pigs and cattle. The American Meat Institute has taken a stand against biofuels mandates, launching a Web site called “Balanced Food and Fuel” that is filled with gloomy stories about rising food costs and the effect of biofuels.

In fact, the truth is somewhere in the middle regarding ethanol’s contribution to rising food prices, said Scott Irwin, a professor of agriculture at the University of Illinois at Urbana-Champaign. While the ethanol industry has pushed up the price of corn, that increase does not explain the total rise in food costs, he said.

“A dominant factor is the price of crude oil, and the way energy prices feed through everything in the economy,” Irwin said.

Still, the new GMA campaign sets its sights squarely on ethanol. Earlier this month, the Washington D.C., newspaper Roll Call reported on the contents of a nearly 20-page memo from the Glover Park Group that laid out a detailed national campaign aimed at turning public opinion against the use of biofuels and pressuring federal legislators to turn back ethanol mandates. Openshaw wouldn’t comment on the details of the plan, but confirmed the GMA will be pressing its case this summer.

In a U.S. Department of Agriculture briefing last week, White House economic advisers said ethanol made from corn is responsible for just 2 percent to 3 percent of the overall increase in global food prices, which are up more than 40 percent this year over last year.

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