WASHINGTON — The increased use of ethanol could cost the government up to $900 million for food stamps and child nutrition programs, a congressional report says.
Higher use of the corn-based fuel additive accounted for about 10 percent to 15 percent of the rise in food prices between April 2007 and April 2008, according to the nonpartisan Congressional Budget Office. That translates into higher costs for food programs for the needy.
The CBO said other factors, such as skyrocketing energy costs, had an even greater impact than ethanol on food prices during that period. Economists estimate that increased costs for food programs overall due to higher food prices will be about $5.3 billion in the current budget year.
Ethanol's impact on future food prices is uncertain, the report says, because an increased supply of corn has the potential to eventually lower food prices. Roughly one quarter of corn grown in the United States is now used to produce ethanol.