He said yesterday that the three-year-old program to support the production of ethanol - a corn-derived alcohol used as a gasoline additive - is not the dominant factor in increasing the price of corn and other commodities.
Mr. McGuinty said that energy prices have risen and that severe droughts in the world have limited crops. He also noted that an emerging middle class in China and India is seeking a better quality of food.
"A whole bunch of circumstances are driving up food prices," he told reporters after speaking to the fourth annual Agri-Food summit.
Ontario launched a 12-year, $520-million plan in 2005 after implementing a requirement that there be at least 5 per cent ethanol in all gasoline sold in the province. More than $26-million in capital grants to producers have been approved, with operational grants allocated for 485 million litres of ethanol in the next decade.
The incentives are luring investors into the ethanol business, and there are fears that production of the additive could eventually consume virtually all of the province's corn production of about 283 million bushels a year. The concern, which seems borne out by recent food riots in Asia, is that the scarcity of the commodity will push up prices for food processors dependent on corn for cereals and sweeteners and for farmers who use corn to feed their poultry.
Last year, about 2.1 million acres of land in Ontario were planted in corn, compared with 1.6 million acres the year earlier. Officials at the Ministry of Agriculture expect the acreage devoted to corn to increase significantly in the next few years.
The ministry estimates Ontario farms are providing about 350 million litres of the current demand for ethanol of 850 million litres. It anticipates that by 2012, Ontario will be producing 1.8 billion litres and will be an exporter, rather than an importer.
Mr. McGuinty said the government is convinced that Ontario's hunger for corn is not driving up prices.
"The big driver here in Ontario has not been ethanol," he told reporters. "All grain prices have gone up, not just corn."
Agriculture Minister Leona Dombrowsky said the government has invested $7.5-million into research on ethanol production that leaves corn kernels for consumer use and derives ethanol from the husks and stalks left after harvesting.