U.S. Ethanol Production and Its Effects on Food Prices in Developing Countries
Rising food prices throughout the world from mid 2007 to mid 2008 have raised concerns for developing countries. Critics and associations have blamed the increase in U.S. ethanol production for rising food prices. This study examines how U.S. ethanol production affects food prices in developing countries. I reviewed articles, reports, publications and newsletters and highlighted the various views about U.S. ethanol production and its effects on food prices and other agricultural commodities. I focus on Senegal as a case study in this research. An analysis of Senegal’s imports of rice from Thailand, Vietnam and India through the Food and Agricultural Organization, World Bank and United States Department of Agriculture was used in the research. When conceptualizing my research, I hypothesized that U.S. ethanol production was not the main contributor to the increase in food prices in all developing countries. It may contribute more in countries that rely on corn as a staple grain in its peoples’ diets as opposed to those developing nations that do not. Other factors, besides U.S. ethanol production may affect prices of food in some developing countries, including climate changes, agricultural trade, government policies, and consumer demands. However, by analyzing data, my initial hypothesis was proven wrong. The case study of Senegal assisted in proving that although corn is not a staple grain in the country, its food prices were indirectly affected by the expansion of ethanol production and other factors were only additional affects.