I was recently offered a stake in the burgeoning ethanol industry. As many acres of Brazilian farmland as I could afford, on which to grow sugar cane that would be refined into fuel. The unsolicited email didn’t mention how many tropical hardwoods I might have to bulldoze in the process.

I next expect an email from Archer Daniels Midland (Ticker ADM on the NYSE) encouraging me to plant my backyard with corn so that I can do the neighbourly thing and help wean America from it’s dependency on foreign oil. The agribusiness giant is the largest U.S. producer of ethanol, which it makes by processing corn in coal-fired plants at its company base in Decatur, Illinois, and elsewhere in the American Midwest. They have more coal-fired plants both under construction and on the drawing board.

ADM’s appetite for corn might threaten the ears that are destined for my dinner plate, but the prospect of helping the US hasten their withdrawal from the Middle East is also appealing, and I think I could forego the pleasures of a cob of sweet corn if that were to help Iraqi children escape the crossfire of our lust for oil.

Yet none of the advocates of turning food into SUV fuel have yet been able to convince me that putting ethanol in my tank will bring peace and security and global cooling. I’m encouraged by efforts to turn biowaste into fuel, well as long as it doesn’t take even more fuel to do so. But turning farmland into a fuel source in a world where hunger exists and hundreds of millions depend on corn for a dietary staple makes little sense to me.

How would you feel if the price of your daily tortilla doubled because the demand for corn was being sucked up by ADM and their friends in the automobile industry? What if the barely didn’t end up in your beer, or the wheat in your spaghetti, because it was diverted to a fuel tank instead? Forget taking up arms to secure an oil supply. Just wait until the barley wars get started.

In July, the Organization for Economic Co-operation and Development said higher demand for biofuels is causing “fundamental changes” to agricultural markets that could drive up prices. They see structural changes under way that could well keep prices for many agricultural products higher over the coming decade and beyond.

“We haven’t seen anything on this scale before,” Martin von Lampe, an agricultural economist in Paris at the Organization for Economic Co-operation and Development, told Bloomberg News. The OECD predicts that net food importing countries as well as the urban poor will likely be hit hardest.

American political pundit Bill Maher recently suggested that the ethanol push is a ‘scam’ perpetrated by ADM to advance their own business interests. But ADM has some splendid connections in the corridors of power, no doubt influenced with a few extra tortillas from the family coffers. And their credentials include a central role as founding members of the Renewable Fuels Association.

ADM’s political weight is behind the 54 cent per gallon tariff that the US government has imposed on imports of sugar cane based ethanol from Brazil, which is cheaper than ADM’s corn-based fuel. Iowa’s Senator Grassley recently stated his intention to block any attempt to remove the tariff on lower cost Brazilian fuel in the face of rising gas prices, stating that “lifting this tariff would be counter-productive to the widely supported goal of promoting home-grown renewable sources of energy.” So maybe they won’t need our Canadian corn after all.

Despite the company’s attempts at green packaging, ADM is ranked as the tenth worst corporate air polluter on the “Toxic 100” list of the Political Economy Research Institute at the University of Massachusetts. The Department of Justice and the Environmental Protection Agency has charged the company with violations of the Clean Air Act in hundreds of processing units, covering 52 plants in 16 states. In 2003 the two agencies reached a $351 million settlement with the company. Currently, the corporation is involved in approximately 25 administrative and judicial proceedings connected to federal and state Superfund laws regarding the environmental clean up of sites contaminated by ADM operations.

To understand the hidden costs of corn-based ethanol requires factoring in “the huge, monstrous costs of cleaning up polluted water in the Mississippi River drainage basin and also trying to remedy the negative effects of poisoning the Gulf of Mexico,” says Tad Patzek of the University of California’s Civil and Environmental Engineering department. This poisoning isn’t unique to the US, as our own Great Lakes are also at risk.

“These are not abstract environmental effects,” Patzek asserts, “these are effects that impact the drinking water all over the Corn Belt, that impact also the poison that people ingest when they eat their food, from the various pesticides and herbicides.” Corn farming clearly leads all crops in total application of pesticides, according to the USDepartment of Agriculture, and is the crop most likely to leach pesticides into drinking water.

If taking a stand against the kind of agribusiness represented by ADM ever develops into one of those ‘you’re either with us or against us’ scenarios, then I side with the corn roasters, pasta makers and beer drinkers. At the very least, ADM’s actions might cause socially and environmentally sensitive shareholders to consider whether they deserve to be marked for eradication from an investment portfolio.

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