Ahead of the Bell: Biofuels under scrutiny

The government's embrace of ethanol as a substitute for gasoline will be scrutinized Wednesday as lawmakers analyze the causes of rising food prices.

Congress passed a law four months ago that requires ethanol producers to double their output of corn-based fuel to 15 billion gallons by 2015.

The mandate has been a boon to ethanol producers such as VeraSun Energy Corp. and Archer Daniels Midland Co. But lawmakers are now reconsidering the policy as a combination of factors, including the growing corn supply headed to ethanol plants, push Americans' food expenses to their highest levels in 17 years.

Farmers and ethanol producers say the biofuel industry is not the prime culprit behind skyrocketing food prices, and instead point to poor weather conditions, a falling dollar and low food stockpiles.

The Senate Committee on Homeland Security will look at the impact ethanol subsidies at a hearing scheduled to begin at 10 a.m. EDT.

Responding to federal incentives, farmers planted the largest crop of corn in 60 years this season, leaving fewer acres for soybeans, grain and other agricultural staples. Higher demand for those commodities has pushed up costs for food producers, who have passed expenses on to consumers.

Experts disagree on how much of the rise in food prices is due to ethanol policy, but most agree it has played a part. The Department of Agriculture puts biofuel's affect on food at about 20 percent. A soon to be released report by the International Food Policy Research Institute blames 30 percent of the food price rise between 2000 and 2007 on biofuels.

Lawmakers will hear from the institute's director for environment technology as well as academics and food bank organizers.

The hearing comes days after two dozen Republican senators urged the Environmental Protection Agency to consider suspending or restructuring biofuel mandates, citing their negative affect on food prices.