Food vs fuel
Food vs fuel is the dilemma regarding the risk of diverting farmland or crops for
biofuels production in detriment of the food supplyon a global scale. The "food vs. fuel" or "food or fuel" debate is internationally controversial, with good-and-valid arguments on all sides of this ongoing debate. There is disagreement about how significant this is, what is causing it, what the impact is, and what can or should be done about it. [Cite web|url=http://news.bbc.co.uk/1/hi/business/7026105.stm|publisher=BBC News|title=Will biofuel leave the poor hungry?|author=Maggie Ayre |date=2007-10-03|language=|accessdate=2008-04-28] [Cite web| url=http://www.farmfutures.com/ME2/dirmod.asp?sid=CD26BEDECA4A4946A1283CC7786AEB5A&nm=News&type=news&mod=News&mid=9A02E3B96F2A415ABC72CB5F516B4C10&tier=3&nid=BA3B97B230724D7C904E54CB50E9E9B5 |title=The Biofuel Smear Campaign|publisher= Farm Futures|author=Mike Wilson |date=2008-02-08| accessdate=2008-04-28 |language= ] [Cite web |url=http://www.time.com/time/magazine/article/0,9171,1725975,00.html|title=The Clean Energy Scam|publisher=Time Magazine|author=Michael Grundwald|date=2008-03-27|accessdate=2008-04-28|language=]
Biofuel production has increased in recent years. Some commodities like
maize, sugar caneor vegetable oilcan be used either as food, feed or to make biofuels. For example, since 2006, land that was also formerly used to grow other crops in the United Statesis now used to grow maize for biofuels, and a larger share of maize is destined to ethanolproduction, reaching 25% in 2007.cite web|url=http://www.time.com/time/business/article/0,8599,1684910,00.html?iid=sphere-inline-sidebar|title=After the Oil Crisis, a Food Crisis? |author= Kathleen Kingsbury|publisher=Time Magazine|accessdate=2008-04-28|date=2007-11-16|language=] A lot of R&D efforts are currently being put into the production of second generation biofuels from non-food crops, crop residues and waste. [See for example the Biomass Program under the US Department of Energy: http://www1.eere.energy.gov/biomass/] With global demand for biofuels on the increase due to the oil price increases taking place since 2003 and the desire to reduce oil dependency as well as reduce GHG emissions from transportation, there is also fear of the potential destruction of natural habitats by being converted into farmland.cite web | url= http://www.ft.com/cms/s/0/e780d216-5fd5-11dc-b0fe-0000779fd2ac.html?nclick_check=1 | title= OECD Warns Against Biofuels Subsidies|date=2007-09-10|author=Andrew Bounds|publisher=Financial Times |language=] Environmental groups have raised concerns about this trade-off for several years, [cite web|url=http://www.monbiot.com/archives/2004/11/23/feeding-cars-not-people/|title=Feeding Cars, Not People |author=George Monbiot|publisher=Monbiot.com|accessdate=2008-04-28|date=2004-11-23|language=] [cite web|url=http://www.climnet.org/EUenergy/2006_EEB_BiofuelsStrategy.pdf|title=Biofuels no panacea |author=European Environmental Bureau|accessdate=2008-04-28|date=2006-02-08|language=] [cite web|url=http://www.planetark.com/dailynewsstory.cfm/newsid/32656/story.htm|title=Food Security Worries Could Limit China Biofuels |author=Planet Ark|accessdate=2008-04-28|date=2005-09-26|language=] [cite web|url=http://www.greenpeace.org.uk/blog/climate/biofuels-green-dream-or-climate-change-nightmare-20070509|title= Biofuels: green dream or climate change nightmare |author=Greenpeace UK|accessdate=2008-04-28|date=2007-05-09|language=] but now the debate reached a global scale due to the 2007–2008 world food price crisis. On the other hand, several studies do show that biofuel production can be significantly increased without increased acreage. Therefore stating that the crisis in hand relies on the food scarcity. [See for example: the US (DOE and USDA) "Billion Ton Report": http://feedstockreview.ornl.gov/pdf/billion_ton_vision.pdf or an EU (Refuel) report http://www.refuel.eu/fileadmin/refuel/user/docs/REFUEL_D19a_flyer_feedstock_potentials.pdf] [cite web
title= "FOOD AND FUEL II - Biofuels will help fight hunger"
date= 2007-08-06 |publisher= "
International Herald Tribune"
accessdate= 2008-04-15 ] [http://www.guardian.co.uk/commentisfree/2008/feb/28/alternativeenergy.biofuels Through biofuels we can reap the fruits of our labours] ]
Brazilhas been considered to have the world's first sustainable biofuels economyCitation | last = Inslee, Jay; Bracken Hendricks | title = Apollo's Fire | year = 2007 | pages=153-155, 160-161 | publisher = Island Press, Washington, D.C. | id = ISBN 978-1-59726-175-3 . "See Chapter 6. Homegrown Energy." ] [cite news|url=http://www.nytimes.com/2006/04/10/world/americas/10brazil.html?pagewanted=1&sq=Bush%20Brazil%20ethanol&st=nyt&scp=5 |title=With Big Boost From Sugar Cane, Brazil Is Satisfying Its Fuel Needs |author=Larry Rother|publisher= The New York Times|date=2006-04-10|accessdate=2008-04-28|language= ] cite news|url=http://www.economist.co.uk/world/americas/displaystory.cfm?story_id=11632886&CFID=15272549&CFTOKEN=63499038 |title=Biofuels in Brazil: Lean, green and not mean |author=|publisher= The Economist|date=2008-06-26|accessdate=2008-07-30|language= From "The Economist" print edition] and its government claims Brazil's sugar cane based ethanol industry has not contributed to the 2008 food crises.Cite news|url=http://veja.abril.com.br/300408/p_058.shtml|title=Ele é o falso vilão|author=Julia Duailibi|publisher=Veja Magazine|language=Portuguese|date=2008-04-27|accessdate=2008-04-28] A World Bankpolicy research working paper released in July 2008Cite web | url=http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2008/07/28/000020439_20080728103002/Rendered/PDF/WP4682.pdf|title=A note on Rising Food Crisis|publisher= The World Bank| author=Donald Mitchell|language=|date=July 2008|accessdate=2008-07-29Policy Research Working Paper No. 4682. Disclaimer: This paper reflects the findings, interpretation, and conclusions of the authors, and do not necessarily represent the views of the World Bank] concluded that "...large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices", and also stated that "Brazil's sugar-based ethanol did not push food prices appreciably higher".Cite news|url=http://vejaonline.abril.com.br/notitia/servlet/newstorm.ns.presentation.NavigationServlet?publicationCode=1&pageCode=1&textCode=145568&date=currentDate |title=Etanol não influenciou nos preços dos alimentos
Editora Abril| author=Veja Magazine|language=Portuguese|date=2008-07-28|accessdate=2008-07-29] Cite news|url=http://www.alertnet.org/thenews/newsdesk/N28615016.htm|title=Biofuels major driver of food price rise-World Bank |author=|publisher=Reuters|language=|date=2008-07-28|accessdate=2008-07-29]
Food price inflation
From 1974 to 2005 real food prices (adjusted for inflation) dropped by 75%. Food commodity prices were relatively stable after reaching lows in 2000 and 2001. Therefore, recent rapid food price increases are considered extraordinary. A
World Bankpolicy research working paper published on July 2008 found that the increase in food commodities prices was led by grains, with sharp price increases in 2005 despited record crops worldwide. From January 2005 until June 2008, maizeprices almost tripled, wheatincreased 127 percent, and ricerose 170 percent. The increase in grain prices was followed by increases in fats and oil prices in mid-2006. On the other hand, the study found that sugar caneproduction has increased rapidly, and it was large enough to keep sugar price increases small except for 2005 and early 2006. The paper concluded that biofuels produced from grains have raised food prices in combination with other related factors between 70 to 75 percent, but ethanol produced from sugar cane has not contributed significantly to the recent increase in food commodities prices.
An economic assessment report published by the
OECDin July 2008cite web|url=http://www.oecd.org/dataoecd/19/62/41007840.pdf|title=Economic Assessment of Biofuel Support Policies |author=Directorate for Trade and Agriculture, OECD |publisher= OECD|date=2008-07-16|accessdate=2008-08-01|language= Disclaimer: This work was published under the responsibility of the Secretary-General of the OECD. The views expressed and conclusions reached do not necessarily correspond to those of the governments of OECD member countries.] found that "...the impact of current biofuel policies on world crop prices, largely through increased demand for cereals and vegetable oils, is significant but should not be overestimated. Current biofuel support measures alone are estimated to increase average wheat prices by about 5 percent, maize by around 7 percent and vegetable oil by about 19 percent over the next 10 years."cite web|url=http://www.oecd.org/document/28/0,3343,en_2649_37401_41013916_1_1_1_1,00.html|title=Biofuel policies in OECD countries costly and ineffective, says report |author=Directorate for Trade and Agriculture, OECD |publisher= OECD|date=2008-07-16|accessdate=2008-08-01|language=]
Corn is used to make ethanol and prices went up by a factor of three in less than 3 years (measured in US dollars). [ [http://futures.tradingcharts.com/printchart/CN/M Corn (C, CBOT): Monthly Price Chart ] ] Reports in 2007 linked stories as diverse as food riots in Mexico due to rising prices of corn for tortillas, [ [http://www.zmag.org/content/showarticle.cfm?SectionID=59&ItemID=12030 "The Costs of Rising Tortilla Prices in Mexico"] — Enrique C. Ochoa, February 3, 2007.] and reduced profits at Heineken the large international brewer, to the increasing use of corn (maize) grown in the US Midwest for ethanol production. (In the case of beer, the barley area was cut in order to increase corn production. Barley is not currently used to produce ethanol.) [ "
Financial Times", London, February 25 2007, quoting Jean-François van Boxmeer, chief executive.] [For an explanation of this ripple effect that pushes up not only the price of corn, but also that of other farming products, see this [http://www.youtube.com/watch?v=6ws3iGja4LA excerpt from a speech] by Paul Roberts at the Commonwealth Club of California(video).] Wheat is up by almost a factor of 3 in 3 years, [ [http://futures.tradingcharts.com/printchart/CW/M Wheat (W, CBOT): Monthly Price Chart ] ] while soybeans are up by a factor of 2 in 2 years (both measured in US dollars). [ [http://futures.tradingcharts.com/printchart/SB/M Soybeans (S, CBOT): Monthly Price Chart ] ] [ [http://media.cleantech.com/2360/why-ethanol-production-will-drive-world-food-prices-even-higher-in-2008 Why ethanol production will drive world food prices even higher in 2008 | Cleantech.com ] ]
As corn is commonly used as feed for
livestock, higher corn prices lead to higher prices in Animal source foods. Vegetable oilis used to make biodieseland has about doubled in price in the last couple years. The price is roughly tracking crude oil prices. [ [http://www.abc.net.au/news/stories/2007/07/19/1982450.htm Biofuel demand makes fried food expensive in Indonesia - ABC News (Australian Broadcasting Corporation) ] ] [ [http://www.iht.com/articles/2008/01/19/business/palmoil.php The other oil shock: Vegetable oil prices soar - International Herald Tribune ] ] [ [http://futures.tradingcharts.com/printchart/CO/M Light Crude Oil (CL, NYMEX): Monthly Price Chart ] ] The 2007–2008 world food price crisisis blamed partly on the increased demand for biofuels. [ [http://www.independent.co.uk/environment/biofuel-the-burning-question-808959.html Biofuel: the burning question] ]
Rice prices have gone up by a factor of 3 even though rice is not directly used in biofuels. [ [http://www.businessweek.com/globalbiz/content/apr2008/gb20080428_894449.htm Understanding the Global Rice Crisis ] ]
The USDA expects the 2008/2009 wheat season to be a record crop and 8% higher than the previous year. They also expect rice to have a record crop. [ [http://www.reuters.com/article/topNews/idUSSP13688520080510 U.S. sees record world food crops easing crisis | Reuters ] ] Wheat prices have dropped from a high over $12/bushel in May 2008 to under $8/bushel in May. [ [http://futures.tradingcharts.com/chart/CW/78 Wheat (W, CBOT): Daily Commodity Futures Price Chart: July, 2008 ] ] Rice has also dropped from its highs.
According to a new report from the World Bank [ [http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2008/07/28/000020439_20080728103002/Rendered/PDF/WP4682.pdf] ] , the production of biofuel is pushing up food prices. These conclusions were confirmed by the Union of Concerned Scientists in their September 2008 newsletter [ [http://www.ucsusa.org/food_and_agriculture/feed/feed-september-2008.html] ] in which they remarked that the World Bank analysis "contradicts U.S. Secretary of Agriculture Ed Schaffer's assertion that biofuels account for only a small percentage of rising food prices."
Ethanol fuel as an oxygenate additive
The demand for ethanol fuel produced from
field cornwas spured in the U.S. by the discovery that methyl tertiary butyl ether (MBTE) was contaminating groundwater. [cite web |url=http://www.eia.doe.gov/pub/oil_gas/petroleum/feature_articles/2006/mtbe2006/mtbe2006.pdf |title= Eliminating MTBE in Gasoline in 2006|date=2006-02-22|publisher=Environmental Information Administration|accessdate=2008-08-10] Citation | last = Goettemoeller, Jeffrey; Adrian Goettemoeller | title = Sustainable Ethanol: Biofuels, Biorefineries, Cellulosic Biomass, Flex-Fuel Vehicles, and Sustainable Farming for Energy Independence | year = 2007| publisher = Praire Oak Publishing, Maryville, Missouri |pages=42 |language=| id = ISBN 978-0-9786293-0-4 ] MBTE use as a oxygenateadditive was widespread due to mandates of the Clean Air Act amendments of 1992 to reduce carbon monoxideemissions. As a result, by 2006 MTBE use in gasoline was banned in almost 20 states. There was also concern that widespread and costly litigation might be taken against the U.S. gasoline suppliers, and a 2005 decision refusing legal protection for MBTE, opened a new market for ethanol fuel, the primary substitute for MBTE. At a time when corn prices were around US$2 a bushel, corn growers recognized the potential of this new market and delivered accordingly. This demand shift took place at a time when oil prices were already significantly rising.
That food prices went up at the same time fuel prices went up is not surprising and should not be entirely blamed on biofuels. Energy costs are a significant cost for
fertilizer, farming, and food distribution. Also, Chinaand other countries have had significant increases in their imports as their economies have grown. [ [http://www.farmandranchguide.com/articles/2008/01/28/ag_news/regional_news/regs13.txt ‘Weak correlation' between food and fuel prices Farm and Ranch Guide: Regional News ] ] [ [http://biofuelsdigest.com/blog2/its-not-food-its-not-fuel-its-china-meat-vs-fuel-grain-trends-in-china-1995-2008/ It's not food, it's not fuel, it's China: Grain trends in China 1995-2008] ] Sugar is one of the main feedstocks for ethanol and prices are down from 2 years ago. [ [http://www.purchasing.com/article/CA6538783.html World sugar supply to expand - 3/6/2008 6:38:00 AM - Purchasing ] ] [ [http://futures.tradingcharts.com/printchart/SU/M Sugar #11 (SB, NYBOT): Monthly Price Chart ] ] Part of the food price increase for international food commodities measured in US dollars is due to the dollar being devalued. [ [http://www.pinr.com/report.php?ac=view_report&report_id=497&language_id=1 PINR - Soaring Commodity Prices Point Toward Dollar Devaluation ] ] Protectionism is also an important contributor to price increases. [ [http://biz.yahoo.com/tm/080411/17085.html?.v=1 Forex Trader Top 3: G7, Worldwide Food Prices, and Consumer Sentiment: Financial News - Yahoo! Finance ] ] 36% of world grain goes as fodder to feed animals, rather than people. [cite web | title = Crop Prospects and Food Situation - Global cereal supply and demand brief | publisher = Food and Agriculture Organization of the United Nations | url = http://www.fao.org/docrep/010/ai465e/ai465e04.htm | format = HTML | accessdate = 2008-04-21]
Over long time periods
population growthand climate changecould cause food prices to go up. However, these factors have been around for many years and food prices have jumped up in the last 3 years, so their contribution to the current problem is minimal. [ [http://www.nytimes.com/2008/05/14/business/worldbusiness/14food.html?_r=3&adxnnl=1&oref=slogin&partner=rssnyt&emc=rss&adxnnlx=1210858219-6h6cWsH086zu54tvcDuKXw Indians Find U.S. at Fault in Food Cost - New York Times ] ]
Governments distorting food and fuel markets
France, Germany, The United Kingdom and The United States governments have supported biofuels with tax breaks, mandated use, and subsidies. These policies have the
unintended consequenceof diverting resources from food production and leading to surging food prices and the potential destruction of natural habitats.cite web |url= http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=7216688&story_id=10252015 | title= The Economist – The End Of Cheap Food] Current government policies cause distortions of supply and demand. Without government involvement the move to biofuels would not be so drastic and food prices would not have gone up so much.
Fuel for agricultural use often does not have
fuel taxes (farmers get duty-free petrol or diesel fuel). Biofuels may have subsidies [ [http://www.foreignaffairs.org/20070501faessay86305/c-ford-runge-benjamin-senauer/how-biofuels-could-starve-the-poor.html Foreign Affairs - How Biofuels Could Starve the Poor - C. Ford Runge and Benjamin Senauer ] ] and low/no retail fuel taxes. [ [http://www.eere.energy.gov/afdc/progs/ind_state_laws.php/TX/BIOD Alternative Fuels & Advanced Vehicles Data Center ] ] Biofuels compete with retail gasoline and diesel prices which have substantial taxes included. The net result is that it is possible for a farmer to use more than a gallon of fuel to make a gallon of biofuel and still make a profit. Some argue that this is a bad distortion of the market. There have been thousands of scholarly papers analyzing how much energy goes into making ethanol from corn and how that compares to the energy in the ethanol. [http://scholar.google.com/scholar?hl=en&lr=&q=corn+ethanol+(%22energy+gain%22+OR+%22energy+balance%22)&btnG=Search] Government distortions can make things happen that would not make sense in a free market.
World Bankpolicy research working paper concluded that biofuels have raised food prices between 70 to 75 percent. The "month-by-month" five year analysis disputes that increases in global grain consumption and droughts were responsible for significant price increases, reporting that this had had only a marginal impact. Instead the report argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices, as increased production of biofuels in the US and EU were supported by subsidies and tariffs on imports, and considers that without these policies, price increases would have been smaller. This research also concluded that Brazil's sugar cane based ethanol has not raised sugar prices significantly, and recommends removing tariffs on ethanol imports by both the US and EU, to allow more efficient producers such as Brazil and other developing countries, including many African countries, to produce ethanol profitably for export to meet the mandates in the EU and the US.
An economic assessment published by the
OECDin July 2008 agrees with the World Bank report recommendations regarding the negative effects of subsidies and import tariffs, but found that the estimated impact of biofuels on food prices are much smaller. The OECD study found that trade restrictions, mainly through import tariffs, protect the domestic industry from foreign competitors but impose a cost burden on domestic biofuel users and limits alternative suppliers. The report is also critical of limited reduction of GHG emissions achieved from from biofuels based on feedstocks used in Europe and North America, founding that the current biofuel support policies would reduce greenhouse gas emissions from transport fuel by no more than 0.8 percent by 2015, while Brazilian ethanol from sugar cane reduces greenhouse gas emissions by at least 80 percent compared to fossil fuels. The assessment calls for the need for more open markets in biofuels and feedstocks in order to improve efficiency and lower costs.
Oil price increases
Oil price increases since 2003have resulted in increased demand for biofuels. Transforming vegetable oilinto biodieselis not very hard or costly so there is a profitable arbitragesituation if vegetable oil is much cheaper than diesel. Diesel is also made from crude oil, so vegetable oil prices are partially linked to crude oil prices. Farmers can switch to growing vegetable oil crops if those are more profitable than food crops. So all food prices are linked to vegetable oil prices, and in turn to crude oil prices. A World Bankstudy concluded that oil prices and a weak dollar explain 25-30% of total price rise between January 2002 until June 2008.
Demand for oil is outstripping the supply of oil and
oil depletionis expected to cause crude oil prices to go up over the next 50 years. Record oil prices are inflating food prices worldwide, including those crops that have no relation to biofuels, such as rice and fish. [http://www.canada.com/components/print.aspx?id=e08c8e19-4a95-491c-9386-d30afeab5cdf&sponsor= Biofuels are part of the solution] ]
In Germany and Canada it is now much cheaper to heat a house by burning grain than by using fuel derived from crude oil. [ [http://www.stern.de/wirtschaft/immobilien/verbraucher/:Energie-Heizen-Weizen/553103.html Energie: Heizen mit Weizen - Wirtschaft - stern.de ] ] [ [http://www.cbc.ca/health/story/2005/10/14/grain_stove051014.html Grain gaining steam as home-heating option ] ] [ [http://www.grainburningstoves.ca/cost.php Grain Burning Stoves by Prairie Fire Grain Energy. Renewable Fuel - Virtually No Waste - Low Emissions ] ] With oil at $120/barrel a savings of a factor of 3 on heating costs is possible. When crude oil was at $25/barrel there was no economic incentive to switch to a grain fed heater.
From 1971 to 1973, around the time of the
1973 oil crisis, corn and wheat prices went up by a factor of 3. [http://www.farmdoc.uiuc.edu/manage/pricehistory/PriceHistory.asp] There was no significant biofuel usage at that time.
US government policy
Some argue that the US government policy of encouraging ethanol from corn is the main cause for food price increases. [http://www.theindependent.com/stories/03162008/new_foodfuel16.shtml Economic analysis: Ethanol policy is driving up food costs 03/16/08 - Grand Island Independent: News] ] [http://www.ibdeditorials.com/IBDArticles.aspx?id=290119894243935&type=right IBDeditorials.com: Editorials, Political Cartoons, and Polls from Investor's Business Daily - Ethanol Lobby Is Perpetrating A Cruel Hoax] ] [http://blog.nj.com/njv_paul_mulshine/2008/03/ethanol_really_takes_the_cake.html Ethanol really takes the cake - NJVoices: Paul Mulshine] ] [http://www.investors.com/editorial/editorialcontent.asp?secid=1501&status=article&id=292806444260566 Today in Investor's Business Daily stock analysis and business news ] ] [http://www.rollingstone.com/politics/story/15635751/the_ethanol_scam_one_of_americas_biggest_political_boondoggles The Ethanol Scam: One of America's Biggest Political Boondoggles : Rolling Stone ] ] US Federal government ethanol subsidizes total $7 billion per year, or $1.90 per gallon. Ethanol provides only 55% as much energy as gasoline per gallon, realizing about a $3.45 per gallon gasoline trade off. [http://www.economist.com/displaystory.cfm?story_id=10250420 Food prices | Cheap no more | Economist.com] ] Corn is used to feed chickens, cows, and pigs. So higher corn prices lead to higher prices for chicken, beef, pork, milk, cheese, etc.
U.S. Senators introduced the "
BioFuels Security Act" in 2006. "It's time for Congress to realize what farmers in America's heartland have known all along - that we have the capacity and ingenuity to decrease our dependence on foreign oil by growing our own fuel," said U.S. Senator for Illinois Barack Obama. [Baltimore, Chris. [http://www.boston.com/news/nation/washington/articles/2007/01/05/new_us_congress_looks_to_boost_alternate_fuels/?p1=MEWell_Pos5 "New U.S. Congress looks to boost alternate fuels,"] " The Boston Globe", January 5, 2007. Retrieved on August 23, 2007]
Two-thirds of U.S.
oil consumptionis due to the transportation sector. [ [http://www.washingtonpost.com/wp-dyn/articles/A17039-2004Jun4.html After the Oil Runs Out] , washingtonpost.com] The “" Energy Independence and Security Act of 2007"” has a significant impact on U.S. Energy Policy.cite web
url = http://www.thomas.gov/cgi-bin/query/z?c110:H.R.6.ENR:
title = Energy Independence and Security Act of 2007 (Enrolled as Agreed to or Passed by Both House and Senate)
accessdate = 2008-01-18] With the high profitability of growing corn, more and more farmers switch to growing corn until the profitability of other crops goes up to match that of corn. So the ethanol/corn subsidies drive up the prices of other farm crops.
The US - an important export country for food stocks - will convert 18% of its grain output to ethanol in 2008. Across the US, 25% of the whole corn crop went to ethanol in 2007. The percentage of corn going to biofuel is expected to go up. [ [http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/14/ccview114.xml Global warming rage lets global hunger grow - Telegraph ] ]
Since 2004 a US subsidy has been paid to companies that blend biofuel and regular fuel. [ [http://blogs.edmunds.com/.eea4e84 Green Car Advisor - U.S. Taxpayers Subsidizing Biodiesel Sold in Europe ] ] The European biofuel subsidy is paid at the point of sale. [ [http://www.greenbang.com/?s=splash+and+dash Splash And Dash | Greenbang ] ] Companies import biofuel to the US, blend 1% or even 0.1% regular fuel, and then ship the blended fuel to Europe, where it can get a second subsidy. These blends are called B99 or B99.9 fuel. The practice is called "splash and dash". The imported fuel may even come from Europe to the US, get 0.1% regular fuel, and then go back to Europe. For B99.9 fuel the US blender gets a subsidy of $0.999 per gallon. [ [http://www.biofuelsdigest.com/blog2/2008/01/17/european-biodiesel-board-warns-on-argentine-biodiesel-says-fuel-is-subsidized-in-argentina-and-us-then-dumped-in-europe/ European Biodiesel Board warns on Argentine biodiesel; says fuel is subsidized in Argentina and US, then dumped in Europe : Biofuels Digest ] ] The European biodiesel producers have urged the EU to impose punitive duties on these subsidized imports. [ [http://foodcrisis.wordpress.com/2008/04/27/trade-war-brewing-over-us-biofuel-subsidies/ Trade war brewing over US biofuel subsidies « Food Crisis ] ] US lawmakers are also looking at closing this loophole. [ [http://www.icis.com/blogs/biofuels/archives/2007/12/splash-dash-and-a-lot-of-biodi.html Splash dash and a lot of biodiesel pain (The Big Biofuels Blog) ] ] [ [http://thehill.com/business--lobby/finance-panel-set-to-close-splash-and-dash-loophole-2007-06-19.html TheHill.com - Finance panel set to close ‘splash and dash’ loophole ] ]
The US had arranged things so that Japan had to buy rice from US farmers even if they did not want it and they could not re-export that rice. This led to huge stockpiles of unused rice in Japan. This policy may be changing. [ [http://business.timesonline.co.uk/tol/business/industry_sectors/consumer_goods/article3948493.ece Japan's silos key to relieving rice shortage - Times Online ] ]
Freeze on first generation biofuel production
George Monbiothas argued for a 5-year freeze on biofuels while their impact on poor communities and the environment is assessed.cite web
title= "If we want to save the planet, we need a five-year freeze on biofuels"
date= 2007-03-27 |publisher= "
pages= |language= |doi= |archiveurl= |archivedate= |quote=
accessdate= 2008-01-15 ] [ [http://www.monbiot.com/archives/2007/11/06/an-agricultural-crime-against-humanity/ Monbiot.com » An Agricultural Crime Against Humanity ] ] [ [http://www.monbiot.com/archives/2004/11/23/feeding-cars-not-people/ Monbiot.com » Feeding Cars, Not People ] ]
Lord Oxburghhas suggested that Monbiot has "gone too far" with his comments, and one problem with Monbiot's approach is that economic drivers are required in order to push through the development of more sustainable second-generation biofuel processes: these will be stalled if biofuel production decreasesFact|date=June 2008.
A recent UN report on biofuel also raises issues regarding food security and biofuel production.
Jean Ziegler, the UN Special Rapporteur on food, concluded that while the argument for biofuels in terms of energy efficiency and climate change are legitimate, the effects for the world's hungry of transforming wheat and maize crops into biofuel are "absolutely catastrophic," and terms such use of arable land a "crime against humanity." Ziegler also calls for a 5-year moratorium on biofuel production. Ziegler's proposal for a five-year ban was rejected by the U.N. Secretary Ban Ki-moon, who called for a comprehensive review of the policies on biofuels, and said that "just criticising biofuel may not be a good solution".Cite web|url=http://www.guardian.co.uk/environment/2008/apr/05/biofuels.food |title=UN chief calls for review of biofuels policy |author=Julian Borger, |publisher= The Guardian|date=2008-04-05|accessdate=2008-05-01|language= ]
Food surpluses exist in many developed countries. For example, the UK wheat surplus was around 2 million tonnes in 2005. [Defra figures after exports, [http://www.hgca.com/imprima/miprospects/vol08Issue05/minisite/2.htm] .] This surplus alone could produce sufficient bioethanol to replace around 2.5% of the UK's petroleum consumption, without requiring any increase in wheat cultivation or reduction in food supply or exports. However, above a few percent, [(i.e. if the UK wanted to replace more than around 5% of its fuel with biofuel).] there would be direct competition between first generation biofuel production and food production. This is one reason why many view
second generation biofuelsas increasingly important.
Non-food crops for biofuel
There are different types of biofuels and different feedstocks for them, and it has been proposed that only non-food crops be used for biofuel. This avoids direct competition for commodities like
cornand edible vegetable oil. However, as long as farmers can make more money by switching to biofuels they will. [ [http://www.engineeringnews.co.za/article.php?a_id=119281 Food versus fuel debate escalates ] ] [ [http://www.theglobalist.com/StoryId.aspx?StoryId=5077 How Food and Fuel Compete for Land by Lester Brown - The Globalist > > Global Energy ] ] The law of supply and demandpredicts that if fewer farmers are producing food the price of food will rise.
Third generation biofuels (
biofuel from algae) uses non-edible raw materials sources that can be used for biodiesel and bioethanol.
Soybean oil only represents half of the domestic raw materials available for biodiesel production in the United States, is a declining and only one of many raw materials that can be used to produce biodiesel [http://www.biodiesel.org/resources/sustainability/pdfs/Food%20and%20FuelApril162008.pdf] .
Non-food crops like Camelina, Jatropha, seashore mallowand mustard[http://www.biodiesel.org/resources/sustainability/pdfs/Food%20and%20FuelApril162008.pdf] , used for biodiesel, can thrive on marginal agricultural land where many trees and crops won't grow, or would produce only slow growth yields. Camelina is virtually 100 percent efficient. It can be harvested and crushed for oil and the remaining parts can be used to produce high quality omega-3 rich animal feed, fiberboard, and glycerin. Camelina does not take away from land currently being utilized for food production. Most camelina acres are grown in areas that were previously not utilized for farming. For example, areas that receive limited rainfall that can not sustain corn or soybeans without the addition of irrigation can grow camelina and add to their profitability.Fact|date=July 2008 Jatrophacultivation provides benefits for local communities:
Cultivation and fruit picking by hand is labour-intensive and needs around one person per hectare. In parts of rural India and Africa this provides much-needed jobs - about 200,000 people worldwide now find employment through jatropha. Moreover, villagers often find that they can grow other crops in the shade of the trees. Their communities will avoid importing expensive diesel and there will be some for export too. [ [http://royaldutchshellplc.com/2008/02/28/the-guardian-through-biofuels-we-can-reap-the-fruits-of-our-labours/ Through biofuels we can reap the fruits of our labours] ]
NBB’s Feedstock Development program is addressing production of
aridvariety crops, algae, waste greases, and other feedstocks on the horizon to expand available material for biodiesel in a sustainable manner [http://www.biodiesel.org/resources/sustainability/pdfs/Food%20and%20FuelApril162008.pdf] .
Cellulosic ethanolis a type of biofuel produced from lignocellulose, a material that comprises much of the mass of plants. Corn stover, switchgrass, miscanthusand woodchip are some of the more popular non-edible cellulosic materials for ethanol production. Commercial investment in such second-generation biofuels began in 2006/2007, and much of this investment went beyond pilot-scale plants. Cellulosic ethanol commercializationis moving forward rapidly. The world’s first commercial wood-to-ethanol plant began operation in Japan in 2007, with a capacity of 1.4 million liters/year. The first wood-to-ethanol plant in the United States is planned for 2008 with an initial output of 75 million liters/year. [REN21 (2008). [http://www.worldwatch.org/files/pdf/renewables2007.pdf Renewables 2007 Global Status Report (PDF)] p. 19.]
second generation biofuelsmay be commercialized in the future and compete less with food. Synthetic fuelcan be made from coalor biomassand may be commercialized soon.
Biofuel from food byproducts and coproducts
Biofuels can also be produced from the
waste byproducts of food-based agriculture (such as citrus peels [ [http://www.biomassmagazine.com/article.jsp?article_id=1278 Biomass Magazine] ] or used vegetable oil[ [http://www.eric.ed.gov/ERICWebPortal/custom/portlets/recordDetails/detailmini.jsp?_nfpb=true&_&ERICExtSearch_SearchValue_0=EJ749869&ERICExtSearch_SearchType_0=no&accno=EJ749869 eric.ed.gov] ] ) to manufacture an environmentally sustainablefuel supply, and reduce waste disposal cost [ [http://www.ars.usda.gov/research/publications/publications.htm?seq_no_115=212331 ars.usda.gov] ] .
A growing percentage of U.S. biodiesel production is made from waste vegetable oil (recycled restaurant oils) and greases [http://www.biodiesel.org/resources/sustainability/pdfs/Food%20and%20FuelApril162008.pdf] .
Collocationof a waste generator with a waste-to-ethanol plant can reduce the waste producer's operating cost, while creating a more-profitable ethanol production business. This innovative collocation concept is sometimes called holistic systems engineering. Collocation disposal elimination may be one of the few cost-effective, environmentally-sound, biofuel strategies, but its scalabilityis limited by availability of appropriate waste generation sources. For example, millions of tons of wet Florida-and-California citrus peels cannot supply billions of gallons of biofuels. Due to the higher cost of transporting ethanol, it is a local partial solution, at best.
More firms are investigating the potential of fractionating technology to remove
corn germ(i.e. the portion of the corn kernel that contains oil) prior to the ethanol process. Furthermore, some ethanol plants have already announced their intention to employ technology to remove the remaining vegetable oil from dried distillers grains, a coproductof the ethanol process. Both of these technologies would add to the biodieselraw material supply [http://www.biodiesel.org/resources/sustainability/pdfs/Food%20and%20FuelApril162008.pdf] .
End unsustainable biofuel subsidies and tariffs
Some people have claimed that ending subsidies and tariffs would enable
sustainable developmentof a global biofuels market. Taxing biofuel imports while letting petroleum in duty-free does not fit with the goal of encouraging biofuels. Ending mandates, subsidies, and tariffs would end the distortions that current policy is causing. [ [http://globalwarminghoax.wordpress.com/2008/05/08/the-biofuel-dilemma/ The Biofuel Dilemma « The Global Warming Hoax ] ] Some US senators advocate reducing subsidies for corn based ethanol. [ [http://www.brownfieldnetwork.com/gestalt/go.cfm?objectid=BAF2B1F0-C57C-37A6-13694BFCBF364D15 Brownfield Network: Lawmakers square-off over Renewable Fuels Standard ] ] The US ethanol tariff and some US ethanol subsidies are currently set to expire over the next couple years. [ [http://uk.reuters.com/article/environmentNews/idUKN0434878020080204 Bush budget doesn't alter ethanol import tariff | Environment | Reuters ] ] The EU is rethinking their biofuels directivedue to environmental and social concerns. ["EU rethinks biofuels guidelines " By Roger Harrabin bbc.co.uk Monday, 14 January 2008 http://news.bbc.co.uk/2/hi/europe/7186380.stm ] On January 18 2008 the UK House of Commons Environmental Audit Committee raised similar concerns, and called for a moratorium on biofuel targets. ["Committee calls for Moratorium on Biofuels" http://www.parliament.uk/parliamentary_committees/environmental_audit_committee/eac_210108.cfm] Germany ended their subsidy of biodiesel on Jan 1 2008 and started taxing it. [ [http://www.energypublisher.com/article.asp?id=13410 Subsidy loss threatens German bio-fuel industry | EnerPub - Energy Publisher ] ]
Reduce farmland reserves and set asides
Some countries have programs to hold farmland
fallowin reserve. The current crisis has prompted proposals to bring some of the reserve farmland back into use.
The American Bakers Association has proposed reducing the amount of farmland held in the US
Conservation Reserve Program. [ [http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/03-12-2008/0004772559&EDATE= ABA Band of Bakers March on Washington, D.C. Announce Action Plan for Wheat Crisis ] ] Currently the US has convert|34500000|acre|km2 in the program.
In Europe about 8% of the farmland is in
set asideprograms. Farmers have proposed freeing up all of this for farming. [ [http://www.icis.com/blogs/biofuels/archives/2007/07/let-us-farm-set-aside-land-eur.html let us farm set aside land Europe farmers say (The Big Biofuels Blog) ] ] [ [http://www.farmpolicy.com/?p=384 FarmPolicy.com » Blog Archives » EU C
] ] Two-thirds of the farmers who were on these programs in the UK are not renewing when their term expires. [ [http://www.guardian.co.uk/uk/2008/may/25/ruralaffairs.food Eco-farming ditched as food prices soar | UK news | The Observer ] ]
ustainable production of biofuels
Second generation biofuels are now being produced from the cellulose in dedicated energy crops (such as perennial grasses), forestry materials, the co-products from food production, and domestic vegetable waste. Advances in the conversion processes [ [http://environment.newscientist.com/article/dn11364 Hydrogen injection could boost biofuel production] ] will almost certainly improve the sustainability of biofuels, through better efficiencies and reduced environmental impact of producing biofuels, from both existing food crops and from cellulosic sources. [ [http://royalsociety.org/displaypagedoc.asp?id=28914 Sustainable biofuels: prospects and challenges] p. 2.]
Ron Oxburghsuggests that responsible production of biofuels has several advantages:
Produced responsibly they are a sustainable energy source that need not divert any land from growing food nor damage the environment; they can also help solve the problems of the waste generated by Western society; and they can create jobs for the poor where previously were none. Produced irresponsibly, they at best offer no climate benefit and, at worst, have detrimental social and environmental consequences. In other words, biofuels are pretty much like any other product. [Oxburgh, Ron. Fuelling hope for the future, "Courier Mail", 15 August 2007.]
Far from creating food shortages, responsible production and distribution of biofuels represents the best opportunity for sustainable economic prospects in Africa, Latin America and impoverished Asia. Biofuels offer the prospect of real market competition and oil price moderation. According to the
Wall Street Journal, crude oil would be trading 15 per cent higher and gasoline would be as much as 25 per cent more expensive, if it were not for biofuels. A healthy supply of alternative energy sources will help to combat gasoline price spikes.
Impact on poor countries
Demand for fuel in rich countries is now competing against demand for food in poor countries. Cars, not people, used most of the increase in world grain consumption in 2006. The grain required to fill a 25-gallon SUV gas tank with ethanol will feed one person for a year. [ [http://www.theglobalist.com/StoryId.aspx?StoryId=5518 Starving for Fuel: How Ethanol Production Contributes to Global Hunger by Lester Brown - The Globalist > > Global Briefing ] ]
Several factors combine to make recent grain and oilseed price increases impact poor countries more:
World Bankestimated that in 2001 there were 2.7 billion people who lived in povertyon less than US$ (PPP) 2 per day.The World Bank, 2007, Understanding Poverty [http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/0,,contentMDK:20153855~menuPK:373757~pagePK:148956~piPK:216618~theSitePK:336992,00.html] ] This was nearly half the 2001 world populationof 6 billion.
* While rich people buy processed and packaged foods like
Wheaties, where prices don't change much if wheatprices go up, poor people buy more grains like wheat and feel the full impact of grain price changes. [ [http://www.rustylime.com/show_article.php?id=1497 Family food expenditures around the world ] ] [ [http://www.time.com/time/photogallery/0,29307,1645016_1408103,00.html Hungry Planet: What the World Eats, Part II - Photo Essays - TIME ] ]
* Poor people spend a higher portion of their income on food, so higher food prices hurt them more, unless they are farmers. If a poor person spends 60% of their money on food and then the food prices double, they will be in trouble. So higher grain and oilseed prices will affect poorer countries more. [cite web
title= "NGO has biofuel concerns"
date= 2007-11-01 |work= |publisher= "
pages= |language= |doi= |archiveurl= |archivedate= |quote=
accessdate= 2008-01-20 ] [ [http://www.finfacts.com/irelandbusinessnews/publish/article_1011078.shtml Record rise in wheat price prompts UN official to warn that surge in food prices may trigger social unrest in developing countries ] ]
* Aid organizations that buy food and send it to poor countries are only able to send half as much food on the same budget if prices double. But the higher prices mean there are more people in need of aid. [ [http://ap.google.com/article/ALeqM5hNaOD0IxN-Pl68nnhQI2fQIgJ-PgD8V82HQ81 The Associated Press: UN Warns About High Fuel, Food Costs ] ]
The impact is not all negative. The
Food and Agriculture Organization(FAO) recognizes the potential opportunities that the growing biofuel market offers to small farmers and aquaculturers around the world and has recommended small-scale financingto help farmers in poor countries produce local biofuel [http://www.biodiesel.org/resources/sustainability/pdfs/Food%20and%20FuelApril162008.pdf] .
On the other hand, poor countries that do substantial farming have increased profits due to biofuels. If vegetable oil prices double, the profit margin could more than double. In the past rich countries have been dumping subsidized grains at below cost prices into poor countries and hurting the local farming industries. With biofuels using grains the rich countries no longer have grain surpluses to get rid of. Farming in poor countries is seeing healthier profit margins and expanding.
Interviews with local peasants in southern Ecuador [ [http://www.youtube.com/watch?v=O0sxhX8XZB0 Interviews with local peasants in southern Ecuador] ] provide strong anecdotal evidence that the high price of corn is encouraging the burning of tropical forests. The destruction of tropical forests now account for 20% of all greenhouse gas emmisons [ [http://www.iop.org/EJ/abstract/1748-9326/2/4/045021 Tropical deforestation and greenhouse gas emissions Holly K Gibbs et al 2007 Environ. Res. Lett. 2 045021 (2pp) doi: 10.1088/1748-9326/2/4/045021] ] .
National Corn Growers Association
US government subsidies for making ethanol from corn have been attacked as the main cause of the food vs fuel problem. To defend themselves, the US corn growers association has published their views on this issue. [http://www.ncga.com/news/OurView/pdf/2006/FoodANDFuel.pdf] [ [http://the-farmer.com/index.aspx?ascxid=fpStory&fpsid=32480&fpstid=1 The Farmer ] ] [ [http://www.ncga.com/news/notd/2008/January/012408a.asp National Corn Growers Association - NCGA ] ] They consider the "food vs fuel" argument to be a fallacy that is "fraught with misguided logic, hyperbole and scare tactics."
Claims made by the NCGA include:
* Corn growers have been and will continue to produce enough corn so that
supply and demandmeet and there is no shortage. Farmers make their planting decisions based on signals from the marketplace. If demand for corn is high and projected revenue-per-acre is strong relative to other crops, farmers will plant more corn. In 2007 US farmers planted convert|92900000|acre|km2 with corn, 19% more acres than they did in 2006.
* The U.S. has doubled corn yields over the last 40 years and expects to double them again in the next 20 years. With twice as much corn from each acre, corn can be put to new uses without taking food from the hungry or causing deforestation.
* US consumers buy things like
corn flakeswhere the cost of the corn per box is around 5 cents. Most of the cost is packaging, advertising, shipping, etc. Only about 19% of the US retail food prices can be attributed to the actual cost of food inputs like grains and oilseeds. So if the price of a bushel of corn goes up, there may be no noticeable impact on US retail food prices. The US retail food price index has gone up only a few percent per year and is expected to continue to have very small increases.
* Most of the corn produced in the US is
field corn, not sweet corn, and not digestible by humans in its raw form. Most corn is used for livestock feed and not human food, even the portion that is exported.
* Only the starch portion of corn kernels is converted to ethanol. The rest (protein, fat, vitamins and minerals) is passed through to the feed coproducts or human food ingredients.
* One of the most significant and immediate benefits of higher grain prices is a dramatic reduction in federal farm support payments. According to the
USDA, corn farmers received $8.8 billion in government support in 2006. Because of higher corn prices, payments are expected to drop to $2.1 billion in 2007, a 76 percent reduction.
* While the
EROEIand economics of corn based ethanol are a bit weak, it paves the way for cellulosic ethanolwhich should have much better EROEI and economics.
* While basic nourishment is clearly important, fundamental societal needs of
energy, mobility, and energy securityare too. If farmers crops can help their country in these areas also, it seems right to do so.
Controversy within the international system
United Statesand Brazillead the industrial world in global ethanol production, with Brazil as the world's largest exporter and biofuelindustry leader.cite web |url=http://www.washingtonpost.com/wp-dyn/content/article/2007/02/22/AR2007022201361.html |title=Latin America -- the 'Persian Gulf' of Biofuels? |publisher=The Washington Post |date=2007-02-23 |accessdate=2008-04-28|language= ] In 2006 the U.S. produced 18.4 billion liters(4.86 billion gallons), closely followed by Brazil with 16.3 billion liters (4.3 billion gallons), producing together 70% of the world's ethanol market and nearly 90% of ethanol used as fuel.cite web|url=http://siteresources.worldbank.org/INTWDR2008/Resources/2795087-1192112387976/WDR08_05_Focus_B.pdf |title=Biofuels: The Promise and the Risks, in World Development Report 2008 |publisher=The Worl Bank|date=2008|pages= 70-71|accessdate=2008-05-04|language= ] These countries are followed by Chinawith 7.5%, and Indiawith 3.7% of the global market share. [cite web|url=http://www.ethanolrfa.org/industry/statistics/#E|title=Industry Statistics: Annual World Ethanol Production by Country|publisher=Renewable Fuels Association|date= |accessdate=2008-04-28|language= ]
Since 2007, the concerns, criticisms and controversy surrounding the food vs biofuels issue has reached the international system, mainly heads of states, and inter-governmental organizations (IGOs), such as the
United Nationsand several of its agencies, particularly the Food and Agriculture Organization(FAO) and the World Food Programme(WFP); the International Monetary Fund; the World Bank; and agencies within the European Union.
The 2007 controversy: Ethanol diplomacy in the Americas
In March 2007, "ethanol diplomacy" was the focus of President
George W. Bush's Latin American tour, in which he and Brazil's president, Luiz Inácio Lula da Silva, were seeking to promote the production and use of sugar cane based ethanol throughout Latin Americaand the Caribbean. The two countries also agreed to share technology and set international standards for biofuels. The Brazilian sugar cane technology transfer will permit various Central Americancountries, such as Honduras, Nicaragua, Costa Ricaand Panama, several Caribbeancountries, and various Andean Countries tariff-free trade with the U.S. thanks to existing concessionary trade agreements. Even though the U.S. imposes a USD0.54 tariff on every gallon of imported ethanol, the Caribbean nations and countries in the Central American Free Trade Agreementare exempt from such duties if they produce ethanol from crops grown in their own countries. The expectation is that using Brazilian technology for refining sugar cane based ethanol, such countries could become exporters to the United States in the short-term. [cite web |url=http://www.nytimes.com/2007/03/03/business/worldbusiness/03ethanol.html?scp=1&sq=Bush+Brazil+ethanol&st=nyt |title=U.S. and Brazil Seek to Promote Ethanol in West |publisher=The New York Times| author= Edmund L. Andrews and Larry Rother|date=2007-03-03 |accessdate=2008-04-28|language= ] In August 2007, Brazil's President toured Mexicoand several countries in Central America and the Caribbean to promote Brazilian ethanol technology. [cite web |url=http://www.nacion.com/ln_ee/2007/agosto/10/ultima-sr1199181.html |title=Diplomacia de biocombustibles" de Lula no genera entusiasmo |publisher=La Nación | author= Diana Renée |date=2007-08-10 |accessdate=2008-04-28|language=Spanish] This alliance between the U.S. and Brazil generated some negative reactions. While Bush was in São Pauloas part of the 2007 Latin American tour, Venezuela's President Hugo Chavez, from Buenos Aires, dismissed the ethanol plan as "a crazy thing" and accused the U.S. of trying "to substitute the production of foodstuffs for animals and human beings with the production of foodstuffs for vehicles, to sustain the American way of life"." [cite web |url=http://www.nytimes.com/2007/03/10/world/americas/10prexy.html?scp=1&sq=Bush+Brazil+ethanol+Chavez&st=nyt |title=Bush and Chávez Spar at Distance Over Latin Visit |publisher= The Washington Post | author= Jim Rutenberg and Larry Rohter|date=2007-03-10 |accessdate=2008-04-28|language= ] Chavez' complaints were quicky followed by then Cuban President Fidel Castro, who wrote that "you will see how many people among the hungry masses of our planet will no longer consume corn"." "Or even worse"," he continued, "by offering financing to poor countries to produce ethanol from corn or any other kind of food, no tree will be left to defend humanity from climate change"."' [cite web |url=http://query.nytimes.com/gst/fullpage.html?res=9A07E1DE1130F933A05750C0A9619C8B63 |title=Americas: Cuba: Castro Criticizes U.S. Biofuel Policies |publisher=The New York Times|author= |date=2007-03-30 |accessdate=2008-04-28|language= ] Daniel Ortega, Nicaragua's President, and one of the preferencial recipients of Brazil technical aid, said that "we reject the gibberish of those who applaud Bush's totally absurd proposal, which attacks the food security rights of Latin Americans and Africans, who are major corn consumers", however, he voiced support for sugar cane based ethanol during Lula's visit to Nicaragua. [cite web |url=http://english.peopledaily.com.cn/90001/90777/6235427.html |title=Nicaragua president backs sugar-made biofuel as Lula visits |publisher=People's Daily Online |author=Xinhua News |date=2007-08-09 |accessdate=2008-04-28|language= ] [cite web |url=http://www.nacion.com/ln_ee/2007/agosto/09/economia1197405.html |title=Lula ofrece cooperación y energía eléctrica |publisher=La Nación |author=AFP |date=2007-08-09 |accessdate=2008-04-28|language=Spanish ]
The 2008 controversy: Global food prices
As a result of the
international community's concerns regarding the steep increase in food prices, on April 14, 2008, Jean Ziegler, the United Nations Special Rapporteuron the Right to Food, at the Thirtieth Regional Conference of the Food and Agriculture Organization(FAO) in Brasília, called biofuels a "crime against humanity", [cite web|url=http://www1.folha.uol.com.br/folha/dinheiro/ult91u391866.shtml|title=ONU diz que biocombustíveis são crime contra a humanidade|publisher=Folha de Sao Pãulo Online|date=2008-04-14|accessdate=2008-04-28|language=Portuguese] Cite web|url=http://news.bbc.co.uk/2/hi/science/nature/7351766.stm|title=Brazil president defends biofuels|author=Emilio San Pedro
publisher=BBC News|date=2008-04-17|accessdate=2008-04-28|language= ] a claim he had previously made in October 2007, when he called for a 5-year ban for the conversion of land for the production of biofuels. [cite news|url=http://www.independent.co.uk/environment/green-living/production-of-biofuels-is-a-crime-398066.html|date=2007-10-27|title=Production of biofuels 'is a crime'|first=Edith|last=Lederer|publisher=
The Independent|accessdate=2008-04-22] [Cite web|url=http://www.swissinfo.org/eng/front/detail/UN_rapporteur_calls_for_biofuel_moratorium.html?siteSect=105&sid=8305080&cKey=1192127505000&ty=st |title=UN rapporteur calls for biofuel moratorium |author= |publisher=Swissinfo |date=2007-10-11|accessdate=2008-05-01|language= ] The previous day, at their Annual IMFand World Bank Groupmeeting at Washington, D.C., the World Bank's President, Robert Zoellick, stated that "While many worry about filling their gas tanks, many others around the world are struggling to fill their stomachs. And it's getting more and more difficult every day." [Cite web|url=http://www.guardian.co.uk/business/2008/apr/11/worldbank.fooddrinks1 |title=Poor go hungry while rich fill their tanks |author= Larry Elliott and Heather Stewart |publisher= The Guardian |date= 2008-04-11|accessdate=2008-04-30|language=] [Cite web|url=http://www.washingtonpost.com/wp-dyn/content/story/2008/04/29/ST2008042903585.html |title=Siphoning Off Corn to Fuel Our Cars |date=2008-04-30|publisher= The Washington Post|author= Steven Mufson |accessdate=2008-04-30|language=] [cite web|url=http://www1.folha.uol.com.br/folha/bbc/ult272u391745.shtml|title=FMI e Bird pedem ação urgente contra alta alimentar|publisher=Folha de Sao Pãulo Online|date=2008-04-13|accessdate=2008-04-28|language=Portuguese] Luiz Inácio Lula da Silvagave a strong rebuttal, calling both claims "fallacies resulting from commercial interests", and putting the blame instead on U.S.and European agricultural subsidies, and a problem restricted to U.S. ethanol produced from maize. [Cite web|url=http://news.bbc.co.uk/2/hi/science/nature/7351766.stm|title=Brazil Lula defends biofuels from growing criticism|author=Raymond Colitt|publisher=Reuters UK|date=2008-04-16|accessdate=2008-04-28|language= ] He also said that "biofuels aren't the villain that threatens food security"." In the middle of this new wave of criticism, Hugo Chavezreaffirmed his opposition and said that he is concerned that "so much U.S.-produced corn could be used to make biofuel, instead of feeding the world's poor", calling the U.S initiative to boost ethanol production during a world food crisis a "crime." [cite web |url=http://www.washingtonpost.com/wp-dyn/content/article/2008/04/26/AR2008042602475.html |title=Chavez calls ethanol production 'crime' |publisher=The Washington Post |author=The Associated Press |date=2008-04-22 |accessdate=2008-04-28|language= ] German Chancellor Angela Merkelsaid the rise in food prices is due to poor agricultural policies and changing eating habits in developing nations, not biofuels as some critics claim. [Cite web|url=http://www.reuters.com/article/environmentNews/idUSL1721113520080417?feedType=RSS&feedName=environmentNews |title= Bad policy, not biofuel, drive food prices: Merkel|author=Gernot Heller |publisher= Reuters|date=2008-04-17|accessdate=2008-05-01|language= ] On the other hand, British Prime Minister Gordon Browncalled for international action and said Britain had to be "selective" in supporting biofuels, and depending on the U.K.'s assessment of biofuels' impact on world food prices, "we will also push for change in EU biofuels targets". [Cite web|url=http://news.bbc.co.uk/2/hi/uk_news/politics/7359991.stm |title=Brown's biofuels caution welcomed |author= |publisher= BBC News|date=2008-04-22|accessdate=2008-05-01|language= ] Stavros Dimas, European Commissioner for the Environment said through a spokewoman that "there is no question for now of suspending the target fixed for biofuels", though he acknowledged that the EUhad underestimated problems caused by biofuels. [Cite web|url=http://www.dw-world.de/dw/article/0,2144,3266694,00.html |title=Europe Defends Biofuels as Debate Rages |author= |publisher=Deutsche Welle |date=2008-04-14|accessdate=2008-05-01|language= ]
April 29, 2008, U.S. President George W. Bushdeclared during a press conferencethat "85 percent of the world's food prices are caused by weather, increased demand and energy prices", and recognized that "15 percent has been caused by ethanol". He added that "the high price of gasoline is going to spur more investment in ethanol as an alternative to gasoline. And the truth of the matter is it's in our national interests that our farmers grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us"." Regarding the effect of agricultural subsidies on rising food prices, Bush said that "Congress is considering a massive, bloated farm bill that would do little to solve the problem. The bill Congress is now considering would fail to eliminate subsidy payments to multi-millionaire farmers", he continued, "this is the right time to reform our nation's farm policies by reducing unnecessary subsidies". [Cite web|url=http://www.whitehouse.gov/news/releases/2008/04/20080429-1.html |title=Press Conference by the President |author= |publisher= The White House|date=2008-04-29|accessdate=2008-05-01|language= ]
Just a week before this new wave of international controversy began,
U.N. Secretary General Ban Ki-moonhad commented that several U.N. agencies were conducting a comprehensive review of the policy on biofuels, as the world food price crisis might trigger global instability. He said "We need to be concerned about the possibility of taking land or replacing arable land because of these biofuels", then he added "While I am very much conscious and aware of these problems, at the same time you need to constantly look at having creative sources of energy, including biofuels. Therefore, at this time, just criticising biofuel may not be a good solution. I would urge we need to address these issues in a comprehensive manner"." Regarding Jean Ziegler's proposal for a five-year ban, the U.N. Secretary rejected that proposal.
A report released by
Oxfamin June 2008Cite web | url=http://www.oxfam.org/files/bp114-inconvenient-truth-biofuels-0806.pdf|title=Another Inconvenient Truth: Biofuels are not the answer to climate or fuel crisis|publisher= Oxfam| author=Oxfam|language=|date=2008-06-25|accessdate=2008-07-30 Report available in pdf] criticized biofuel policies of rich countries as neither a solution to the climate crisis nor the oil crisis, while contributing to the food price crisis. The report concluded that from all biofuels available in the market, Brazilian sugarcane ethanol is far from perfect but it is the most favorable biofuel in the world in term of cost and GHGbalance. The report discusses some existing problems and potential risks, and asks the Brazilian government for caution to avoid jeopardizing its environmental and social sustainability. The report also says that: “"Rich countries spent up to $15 billion last year supporting biofuels while blocking cheaper Brazilian ethanol, which is far less damaging for global food security"."Cite web | url=http://www.oxfam.org/pressroom/pressrelease/2008-06-25/another-inconvenient-truth-biofuels-are-not-answer |title=Another Inconvenient Truth: Biofuels are not the answer to climate or fuel crisis|publisher= Oxfamweb site| author=Oxfam|language=|date=2008-06-26|accessdate=2008-07-30] [Cite web | url=http://www.bbc.co.uk/portuguese/reporterbbc/story/2008/06/080625_biocombustiveisrelatorio.shtml|title=ONG diz que etanol brasileiro é melhor opção entre biocombustíveis |publisher=BBCBrasil| author= |language=Portuguese |date=2008-06-25|accessdate=2008-07-30]
World Bankresearch report published on July 2008 found that from June 2002 to June 2008 "biofuels and the related consequences of low grain stocks, large land use shifts, speculative activity and export bans" pushed prices up by 70 percent to 75 percent . The study found that higher oil prices and a weak dollar explain 25-30% of total price rise. The study said that "...large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices" and also stated that "Brazil's sugar-based ethanol did not push food prices appreciably higher". The Renewable Fuel Association(RFA) published a rebuttal based on the version leaked before its formal release. [Cite news|url=http://www.guardian.co.uk/environment/2008/jul/03/biofuels.renewableenergy|title=Secret report: biofuel caused food crisis|author=Aditya Chakrabortty |publisher= The Guardian|language=|date=2008-07-04|accessdate=2008-07-29] The RFA critique considers that the analysis is highly subjective and that the author "estimates the impact of global food prices from the weak dollar and the direct and indirect effect of high petroleum prices and attributes everything else to biofuels"." [Cite web|url=http://www.ethanolrfa.org/objects/documents/1812/lecg_work_bank_critique.pdf|title=Critique of World Bank Working Paper “A Note of Rising Food Prices” |author=John M. Urbanchuk|date=2008-07-11|publisher=Renewable Fuel Association|language=|accessdate=2008-07-29]
An economic assessment by the
OECDalso published on July 2008 agrees with the World Bank report regarding the negative effects of subsidies and trade restrictions, but found that the impact of biofuels on food prices are much smaller. The OECD study is also critical of the limited reduction of GHG emissions achieved from from biofuels produced in Europe and North America, concluding that the current biofuel support policies would reduce greenhouse gas emissions from transport fuel by no more than 0.8 percent by 2015, while Brazilian ethanol from sugar cane reduces greenhouse gas emissions by at least 80 percent compared to fossil fuels. The assessment calls on governments for more open markets in biofuels and feedstocks in order to improve efficiency and lower costs. The OECD study concluded that "..."current biofuel support measures alone are estimated to increase average wheat prices by about 5 percent, maize by around 7 percent and vegetable oil by about 19 percent over the next 10 years."
Commodity price shocks
Ethanol fuel in Australia
Ethanol fuel in Brazil
Ethanol fuel in Sweden
Ethanol fuel in the Philippines
Ethanol fuel in the United States
Vegetable oil economy
2007–2008 world food price crisis
last = Goettemoeller, Jeffrey; Adrian Goettemoeller
title = Sustainable Ethanol: Biofuels, Biorefineries, Cellulosic Biomass, Flex-Fuel Vehicles, and Sustainable Farming for Energy Independence
year = 2007
publisher = Praire Oak Publishing, Maryville, Missouri
id = ISBN 978-0-9786293-0-4 . "See Chapter 7. Food, Farming, and Land Use."
last = The Worldwatch Institute
title = Biofuels for Transport: Global Potential and Implications for Energy and Agriculture
year = 2007
publisher = Earthscan Publications Ltd., London, U.K.
id = ISBN 978-1-84407-422-8 . "Global view, includes country study cases of Brazil, China, India and Tanzania".
* [http://www.fao.org/worldfoodsituation FAO World Food Situation]
** [http://www.fao.org/foodclimate World Food Security: the Challenges of Climate Change and Bioenergy]
* [http://www.worldbank.org/html/extdr/foodprices/ The World Bank: Food Price Crises]
** [http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/EXTWDRS/EXTWDR2008/0,,contentMDK:21501336~pagePK:64167689~piPK:64167673~theSitePK:2795143,00.html World Bank, Biofuels: The Promise and the Risks. World Development Report 2008: Agriculture for Development]
** [http://econ.worldbank.org/external/default/main?pagePK=64165259&piPK=64165421&theSitePK=469372&menuPK=64166093&entityID=000020439_20080728103002 Policy Research Working Paper No. WPS 4682: A note on rising food prices]
* [http://www.renewableenergyworld.com/rea/news/story?id=51959 Plenty of Space for Biofuels in Europe]
* [http://www.verasun.com/Feed/index.cfm Benefits of Distillers Grains, VeraSun]
* [http://www.oxfam.org/pressroom/pressrelease/2008-06-25/another-inconvenient-truth-biofuels-are-not-answer Oxfam International: Another Inconvenient Truth: Biofuels are not the answer to climate or fuel crisis]
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