Iowa primaries and global food prices

My excuses for writing one of my rare posts that are about politics and not games. But I read a bunch of news over the holidays and started to make a surprising connection. Fact is that food prices rose a lot globally in 2007, due to supply not meeting demand. Global grain stocks dropped by 55 million tons in 2007. At the same time America turned 30 million tons of maize into fuel, more than half of this drop. But ethanol from maize isn't efficient or economically viable, you could feed one person for a year with the maize needed to create enough ethanol to fill up a SUV. The maize to ethanol fuel business exists only due to generous subsidies.

So why do these subsidies still exist? Many sensible people, even US presidential candidates, have in the past spoken out against them. But today every single US presidential candidate is either silent on the issue or supports ethanol subsidies. Was this change of heart caused by a change in scientific findings? No, it was caused by the curious way the Americans elect their president. Before the presidential election the two parties first elect a nominee. And the elections of the nominees do not all take place at the same time in every state. The Iowa caucuses for the election of both the Republican and the Democrat presidential nominee are first. Winning those gives a candidate a big advantage for the elections in the other states. In the past some people who nationwide polled far behind managed to win the Iowa caucus, and surfed that wave of success all the way to the US presidency. Iowa being predominantly white and rural has profited very much from ethanol subsidies in the past. And that is why no candidate dares to speak out against ethanol subsidies.

Higher food prices create winners and losers, with the winners being farmers, and the losers being poor urban populations. Which really makes me wonder how the picture would look if the first primaries were in New York instead of Iowa, and suddenly all candidates were against ethanol subsidies, because apart from being expensive and inefficient they drive up food prices. In 2004 only 130,000 people came to the Iowa caucuses. It is curious what a big influence this small number of people has on global food prices.