The National Council of Chain Restaurants (NCCR) released a study that claims the U.S. Environmental Protection Agency (EPA) Renewable Fuel Standard (RFS) could cost the restaurant industry up to $3.2 billion annually. The NCCR commissioned PwC to lead the study, which has concluded that the RFS standard has artificially inflated the cost of corn. Rising costs, therefore, have trickled throughout the supply chain, spiking the prices of all goods from dairy to pork to poultry. With 45 percent of all corn in the U.S. diverted to ethanol production, the NCCR points out in its study that the cost of corn has quadrupled since 2005.

According to Rob Green, executive director of the NCCR, the costs trickle down to business owners who do not necessarily work for large corporations:

Chain restaurants rely on these products for the food they serve. According to the PwC study, the federal mandate costs the typical chain restaurant up to $18,000 per year, per restaurant location. That is money that could otherwise go to building new restaurants, expanding operations or hiring new workers.

Fuels America, an advocacy group focused on preserving the RFS, is having none of the NCCR’s argument, calling such claims a “bogus recipe.” Citing other studies and the EPA’s recent analysis of the issue, oil, not corn, is the real driver behind surging food prices. In addition to its claim that out of every dollar spent on food 84 cents go towards petroleum-related costs, Fuels America also pointed out to an Iowa State University study that concluded Americans saved an average of $1.09 per gallon in 2011 because of corn-based ethanol production.

Earlier this month the NCCR criticized an EPA decision that declined to grant a waiver of the RFS, citing that ethanol production, not this year’s drought, has reduced the supply of corn for food and livestock feed.

So who is right? Critics of the corn industry, which the Environmental Working Group estimates has benefited from almost $90 billion in subsidies between 1995 and 2011, and who are not always supportive of the ethanol industry and biofuels will most likely roll their eyes at the NCCR’s complaints. The price of food has long surged since 2007, and whether you believe the accompanying spike in fuel prices was a causation or only a correlation, the NCCR will have a hard time making its argument resonate. Most of the ethanol industry’s feedstock relies on field corn, which is not a food grain; and byproducts of such ethanol production end up as animal feed. Petroleum is the foundation of the U.S. economy, and as its cost grows, so does the price of everything else.

Follow our own biofuel debate here on Triple Pundit.

Published earlier today on Triple Pundit. You can follow Leon and ask him questions on Twitter or Instagram (greengopost).

Image credit: Wikipedia

About The Author

Leon Kaye

Leon Kaye is the founder and editor of GreenGoPost.com. Based in California, he is a business writer and consultant. His work is has also appeared on Triple Pundit , The Guardian's Sustainable Business site and has appeared on Inhabitat and Earth911. His focus is making the business case for sustainability and corporate social responsibility. He's pictured here in Qatar, one of the Middle East countries in which he takes a keen interest because of its transformation into a post-oil economy. Other areas of interest include sustainable development in The Balkans, Brazil and Korea. He was a new media journalism fellow at the International Reporting Project, for which he covered child survival in India during February 2013. Contact him at leon@greengopost.com. You can also reach out via Twitter (@LeonKaye) and Instagram (GreenGoPost). As of October 2013, he now lives and works in Abu Dhabi, United Arab Emirates.