Are biofuels agriculture, or industry?

Posted on June 19, 2007


Biofuels, done properly, may help end the carbon-economy and free the United States from our dependence on foreign oil. But, as I’ve said several times here at S&R, the U.S. isn’t doing biofuels properly. And finally, someone asked a question I hadn’t even thought about – should biofuels and the crops they’re made fro be considered under international agriculture trade agreements, or should they qualify as industrial products like oil, plastics, and coal?

Suparna Karmakar, senior fellow at the Indian Council for Research on International Economic Relations (ICRIER), asks this very question in an editorial for The Economic Times. He points out that the Doha Round of WTO negotiations is stalled because of U.S. insistance on agricultural subsidies, but then points out that “the US is negotiating for the development of stronger WTO rules that will rein in the use of industrial subsidies….” If industrial uses of agricultural products qualify as an industrial subsidy instead of an agricultural subisidy, then this would put the U.S. in the position of hypocritical advocacy, something that the U.S. would want to avoid due to the international relations black eye it would give us.

As someone who is opposed to most agricultural subsidies in general, and corn ethanol subsides in particular, I hope that the other WTO members force a reclassification of biofuel-utilized crops as industrial instead of agricultural specifically because it might force Bush (or, more likely, his successor) to strip away many of the corn ethanol subsidies.

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