Bonanza of bio-fuels

The price of grain broke absolute records worldwide. Good news for farmers: for one ton of wheat, corn or soybeans they get at least 25 percent more than last year. At the Minneapolis Grain Exchange the price of wheat rose to three times the price of 1996, 80 percent more than last year.
The agri-companies in the Great-Plains region in the US, covering a.o. Iowa and Nebraska, are booming like never before, especially thanks to the exploding production of corn, which replaced soybeans in many places. According to the Wall Street Journal the farming sector in the US grossed an average annual income of  61.1 billion dollars. For 2008 an increase of 50 percent is expected.
The cause of these high grainprices lies in the rising demand in China and India, but also in the booming market of bio-fuels. In the US one third of the corn production is destined for bio-ethanol. In the last few months, the big players, like Microsoft-founder Bill Gates, Google-owners Larry Page and Sergej Brin, and stock guru George Soros, invested heavily in the industry, buying big farming estates or shares in bio-fuelcompanies.
The branch is thriving. The Suiss Syngenta, specialized in seeds, crop-protection and other farming products increased profits with 75 percent. Likewise for Cargill, Pioneer and ADM: their profits soared. But the boom has its downside. There are plenty of pressing questions: is it ethical to use edible grain for fuel? What about the environmental consequences? And why further subsidize this soaring industry of bio-fuel, yielding giant profits for multinationals? 
In the US the republican candidate McCain already criticized the subsidies for ethanol-production: one may expect a reform of subsidies to the agri-industry shortly. Until now, in the EU Germany was pioneering the production of bio-fuel. But since the Merkel-administration halted the subsidies for bio-diesel, the market faltered: now German bio-fuel is more expensive than fossile fuel. Unlike in Belgium, in Germany, it is now obligatory to mix in 5 percent bio-fuel. Consequently, the German market is flooded by cheap, tax-free bio-diesel from the US: fatal to German farmers who betted on the production of bio-fuel.

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