I am curious about the way ethanol is priced when used in E10.
The practice has been to price the energy from the ethanol at the same marginal price as the petrol it replaces, currently around 4.5 cents per megajoule (ULP at AUD$1.44/L).
A commodity would normally be priced similarly to the cheapest available alternative. Natural gas is an alternative to petrol and has a retail price in Australia of 1.5 cents per megajoule.

Politicians like to be seen as doing something that will raise their popularity. However, are such blunders entirely their fault?
Science did pretty good job in convincing general public about dangers of global warming. However, when it comes to solutions, we are mute. I have outlined a solution at http://www.sciencealert.com.au/opinions/20083004-17248.html , but many seem to be waiting for funds. And funds are allocated by politicians under pressure of general public. Vicious circle, isn’t it?
We cannot wait for politicians to drop few coins into our hats. We have to start thinking about solutions. And we must present our solutions to general public in a simple way everybody will understand. Only then doors to funds will open.

If only ethanol were made from sugar cane. It's not as if there's a shortage of the stuff. Also, I've never heard of anyone going hungry because they missed out on sugar.

Well, I have only read up to para 3 and wonder about this:-
"Food and he Food and Agricultural Organization (FAO) in their latest data estimates that 100 million tonnes of grain or 1/20th of world production was converted to ethanol worldwide in 2007-2008."
I looked at my calendar? Yep still 2008. Spring in N hemisphere. Does the FAO have a TARDIS?
In fact I can't find the FAO figures at all. A reference would be nice.
I did find a very reasoned conversation about all the factors influencing would food prices here
http://209.85.173.104/search?q=cache:-LXw458-edYJ:www2.ohchr.org/english/issues/food/docs/SRRTFnotefoodcrisis.pdf+Food+and+Agricultural+Organization+(FAO)+estimates+grain+ethanol+worldwide+in+2007-2008.&hl=en&ct=clnk&cd=7&gl=au&client=firefox-a
These include
* Word bank strictures /rules on developing countries/economies.
* European Japanese, Korean, American and Australian farm subsidies.
* The drought in places like Australia
* Poor harvests in Europe.
* Disease/insects (EG 50% reduction in Vietnam's rice crop)
* Stock exchange speculation on food futures
* War and other conflicts
* The world population increases by some 75 million persons each year
* increased logistical & production costs linked to the price of oil.
* Changes in diet (Chinese eating much more meat, for each calorie of beef to be produced,we need 9 calories of plants ; and we need 4.5 calories of plants to produce one calorie of milk or egg.)
* Estimates that, 16% of the land currently under cultivation is threatened by exhaustion.
* Soil degredation
* Climate change.
* Hoarding of food reserves/speculation.
* Import tariffs.
O yes and
* Biofuels (especially the silly USA system) Since 2004, the total increase in the production of corn in the United States has gone to bioethanol. . . .distinctions should be drawn between different sources of agrofuels, some of which represent a more serious threat to food security than others, and some of which may have an underestimated potential.(Like pyrolysis of fuel from waste)
It would be interesting to know how much of the US crop goes to Whiskey, bourbon and other alcoholic drinks.