Are Biofuels the Cause of World's Food Price Crisis?

Biofuels have forced global food prices up by 75% — far more than previously estimated — according to a confidential World Bank report leaked from an internationally-respected economist at a global financial institution by the Guardian of Great Britain. The report starkly contradicts the U.S. government's claims that plant-derived fuels contribute less than 3% to food-price rises. The report will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.

The news comes at a critical point in the world's negotiations on biofuels policy as leaders of the G8 industrialized countries prepare to meet next week in Hokkaido, Japan, where they will discuss the food crisis and come under intense lobbying from campaigners calling for a moratorium on the use of plant-derived fuels.

"Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises," Robert Bailey, policy adviser at Oxfam told the Guardian. "It is imperative that we have the full picture. While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat."

Rising food prices have pushed 100 million people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt. Government ministers here have described higher food and fuel prices as "the first real economic crisis of globalization".

President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that the Guardian reports: "Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases." Successive droughts in Australia, calculates the report, have had a marginal impact. Instead, it argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices.

"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," says the report. The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertilizer prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.

The report argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.

Supporters of biofuels argue that they are a greener alternative to relying on oil and other fossil fuels, but even that claim has been disputed by some experts, who argue that it does not apply to U.S. production of ethanol from plants.

Posted by Casey Kazan.

Source: http://www.guardian.co.uk/environment/2008/jul/03/biofuels.renewableenergy

Comments

[Stumbler]

I think there's an obvious answer that American politicians refuse to look at: domestic Hemp production. Hemp played a key role in the development of our young nation. The cotton, oil, pharmaceutical, and prison industries have spent vast amounts of money to ensure it's continued illegal status, focusing on it's cousin, Cannabis. Even as more Americans are abusing "legal" synthetic drugs, we continue incarcerating our citizens for use of Cannabis. Decriminalize them both, use Hemp for domestic fuel, clothing, paints, etc. Allow the use of Cannabis for recreation, such as tobacco and alcohol. Reduce our total prison population, and increase energy independence, all with the stroke of a single pen.

[Stumbler]

I think there's an obvious answer that American politicians refuse to look at: domestic Hemp production. Hemp played a key role in the development of our young nation. The cotton, oil, pharmaceutical, and prison industries have spent vast amounts of money to ensure it's continued illegal status, focusing on it's cousin, Cannabis. Even as more Americans are abusing "legal" synthetic drugs, we continue incarcerating our citizens for use of Cannabis. Decriminalize them both, use Hemp for domestic fuel, clothing, paints, etc. Allow the use of Cannabis for recreation, such as tobacco and alcohol. Reduce our total prison population, and increase energy independence, all with the stroke of a single pen.

[conservfood]

Biofuels are terrible... it would take some thousands of years of crops to replace a year of fossil fuels. (http://www.conservefood.org) Anyone have any ideas how to get people to stop buying this stuff?