The Obama administration was urged on Monday to stop diverting grain to gas amid warnings of an ‘imminent food crisis’ caused by America’s drought.

US government forecasts of a 4% rise in food prices for US consumers because of the drought have sharpened criticism of supports for producing fuel from corn-based ethanol.

Meanwhile, research published last week by the New England Complex Systems Institute warned of an ‘imminent food crisis’ because of the diversion of corn stocks to ethanol.

‘Necsi has warned for months that misguided food-to-ethanol conversion programs and rampant commodity speculation have created a food price bubble, leading to an inevitable spike in prices by 2013. Now it appears the ‘crop shock’ will arrive even sooner due to drought, unless measures to curb ethanol production and rein in speculators are adopted immediately,’ the researchers warned.

In the latest move, the country’s meat, dairy and poultry producers called on the Environmental Protection Agency to suspend this year’s quotas for corn ethanol production.

‘The extraordinary and disastrous circumstances created for livestock and poultry producers by the ongoing drought in the heart of our grain growing regions requires that all relevant measures of relief be explored,’ said the petition to the EPA’s administrator Lisa Jackson.

It went […]