Wednesday, August 14, 2013


Till recently corn was being blamed for the obesity epidemic in the US because of its connection to High Fructose Corn Syrup (HFCS) which is suspected to be metabolized differently from white sugar. Also adding to the misery of corn is the predominance of genetically modified version in the American landscape which is being viewed with suspicion by a vast majority of people all over the world. When the American government enunciated its biofuel policy, corn got a big boost and conversion of corn into ethanol through microbiological route became a big business. It is a fact that more than 40% of the grain grown in that country finds its way to ethanol distilleries for blending with petroleum fuels. The food and beverage industry which depends  predominantly on corn for formulating their products seems to be in a blind because of the escalating cost of buying their corn needs due to strong pull from the biofuel industry. The result is significant price increase for all the products made from corn including a vast array of fast foods. The fast food industry therefore has a right to blame the supply shortage for its compulsions to raise prices for these products. Here is a take on the dicey situation. 

"From the grocery store to your favorite takeout joint to the drive-thru window, you're paying more for what you eat and leaders in the fast food industry say the reason for these increased costs is the federal government's continued support of corn-based ethanol. The bushel price of corn has nearly tripled in the past decade. Forty percent of what's grown today goes into fuel tanks and that percentage could rise if the current federal mandate--known as the Renewable Fuel Standard--remains in place. "It's harder every day to offer great value because our costs are skyrocketing," Lisa Ingram, president of White Castle, recently said in Washington. "In fact, since the RFS became law our cost for beef has increased by forty-seven percent." The fast food industry contends that with more corn going to ethanol gas, there's less for traditional corn-based food products and feed for farm animals, thus driving up the costs for restaurant owners."

One wonders whether the situation is really so bad as to create a crisis for the fast food industry. After all these fast food joints are severely indicted for their junk foods which are suspected to be causing many life style disorders like CVD, blood pressure and obesity. Why not take a positive view of this development and consider this as a blessing in disguise, as less and less people would patronize junk foods when the prices go up! In a country where business is accorded a higher priority than the health of the citizen, one should not be surprised if the government eventually comes forward to provide relief to the fast food industry through some form of policy intervention! One can understand the dilemma of the government as it wants to reduce consumption of fossil fuels through admixing it with ethanol while corn production is not sufficient to meet the demands from both food and ethanol sectors. It may be time to fast tract development of commercial technologies that can convert non-food biomass into alcohol or accelerate microbiological technologies such as algae so that food sector is insulated from shortages of its feed stock.


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