Most issues below have been raised above. Many inaccurately, or incomplete.
Soil v dirt. It is my understanding that to grow anything, all that is needed is something for the roots to grab, and the appropriate chemicals, water and sunlight supplied. True, crop rotation can reduce the chemicals required (Nitrogen a good example, use sub-clover.)
Grain costs. Ethanol can be made from most organic matter. Grains of any type are good producers of ethanol. The production of ethanol for use as a fuel additive certainly appears to have driven up the cost of grains. For instance, look at a graph of "world grain prices" v time. ( http://www.ifpri.org/node/8436 ).
It does seem logical that higher grain costs would correlate very well with the increased starvation of people (especially children, about 6 million per annum) in the poorer parts of the world. (e.g. http://www.wfp.org/hunger/stats) There are reports that agricultural areas in third world countries are being bought up and utilized for ethanol production.
Just incidentally, Ethanol has a lower HCV (Higher Calorific Value) than petrol. (approx 30,000 MJ/Kg -v- 45,000 MJ/Kg.) This means that ethanol is only worth ~2/3 as much as petrol as a fuel, because it only does 2/3 the work. So for a (say) 10% mix (E10) the value per gallon or liter should be (0.9 + 2/3*.1)/1 ~ 0.967% of the straight (ULP) price. Or for each $1.00 paid for regular ULP, the price for E10 should be 3.3c less. For a 20% mix, (E20) the cost should be 6.7c per $1.00 less.
So there we have it. If you want to (1) help the farmers, (2) damage your car's engine, and (3) help the environment by (4) killing off millions of children in third world countries, then just vote to increase the mandated amount of ethanol in petrol.