The National Review online details some of the effects of mandated corn ethanol here.
The production of ethanol is not the only factor driving food prices up. Demand for food is growing in China and India as more people in those countries move into the middle class. Fuel prices are up, making it more expensive to cultivate food crops and transport them to market. A drought in Australia, a major wheat exporter, has sent bread prices soaring.
But demand for ethanol has also had an impact on food prices. It’s simple economics: Farmers have planted a lot of new corn on acres where they once grew other food crops such as soybeans and wheat, and they are selling all of that new corn — and then some — to ethanol distilleries. That means there are fewer acres devoted to food crops, and there is less corn available for feeding livestock at a time when worldwide demand for meat and milk is rising. Less supply plus greater demand equals higher prices.
There is little the U.S. government can do to make gasoline less expensive and nothing it can do about the weather in Australia. The production of ethanol, on the other hand, is directly related to government policies that subsidize it and require its use in gasoline. Absent government intervention, there would be little demand for ethanol. It has a lower energy content than gasoline, it is not significantly cheaper, and it is more difficult to transport to points of sale.
We force the use of our earliest and dirtiest forms of energy combined to power vehicles and call it green. Food was the original source of energy, and it powered humans and their competitors. Fire was the second form. Burning food that takes great energy to produce doesn’t make sense when the combustion still puts pollution in the air. It really makes less sense as people die of hunger.