Alert Net
Ruth Gidley

Fans of biofuels give the impression we could soon be running cars on maize, producing electricity with sugar, and getting power from palm oil. Using plants to feed our fuel needs sounds like a great idea, and it could be a moneyspinner for some poor countries, but it might well mean people go hungry as food prices rise.

The biofuel boom is only just beginning yet already it has pushed up the cost of staples in places like Mexico where rocketing tortilla prices have sparked angry protests.

Experts are talking about a permanent change in food economics.

“We’re into a new structure of markets,” says British food aid expert Edward Clay. “It could have profound implications on poor people.”

As oil resources run low, and the message about climate change goes mainstream, it’s no surprise that governments and oil companies are looking for alternative fuel sources. U.S. President George W. Bush has made it clear he supports a major shift towards biofuels, and farmers in the United States are getting into it in a big way.

In the agricultural state of Iowa farmers say they are already giving up rotating corn and soya crops to focus on corn alone, which is now highly lucrative as a material for biofuel production.

TORTILLA PROTESTS

Soaring U.S. demand for ethanol – produced from crops like maize and sugar cane – has sent corn prices to their highest level in a decade.

Mexicans are already feeling the impact. Tens of thousands took to the streets in January when the price of tortillas tripled to 15 pesos ($1.36) a kilogramme (2.2 pounds) – about 35 of the flat corn patties that are Mexico’s staple food.

Since half of Mexico lives on $5 a day or less, that’s no small jump, and the Mexican president – who generally presents himself as a champion of free trade – stepped in to cap prices at 78 cents a kilo.

Food prices have been on a downward slide ever since the Second World War, but Clay says one of the big questions now is whether biofuels could reverse that process and take us into a new economic era with obvious implications for the poor.

Farmers can raise crop production pretty quickly so the current hike could be temporary, Clay says. And sky-high oil prices – another factor in making food expensive – could drop.

“By next year, (food) prices will begin to fall away,” he predicts. “But that doesn’t mean they’ll ever fall to what they were before.”

CHINA

The United States is not the only country jumping on the biofuel bandwagon.

China has gone on to become the world’s third-largest bio-ethanol producer after Brazil and the United States, according to Singapore’s Today newspaper.

Economic boomers China and India want to be self-sufficient in fuel, but they also want to be able to feed themselves.

And China’s expanding middle classes want to eat more meat, which requires grain production for feed, which is also pushing up food prices.

Worryingly, numerous scientists and economists say China and India don’t have enough water to increase grain production, whether it’s for animals or fuel.

In December, China put limits on corn-to-ethanol production so as not to lose more precious water to producing fuel at the expense of food, Today reports.

But if China and India keep using up land and water resources at their current rate, they’ll have to buy grain from other countries. “When two of the world’s top three grain producers become importers, it will have a big impact on prices internationally,” Today says.

JATROPHA TREES

However, biofuels could also bring benefits for the world’s poor, according to Robert Zachritz, senior policy adviser for aid agency World Vision.

Although food will be more expensive and there will be less food aid to go round for at least a little while, low-income countries could cash in on high prices for biofuel crops.

“It’s a short-term challenge and a long-term opportunity,” Zachritz says.

Is it possible to produce fodder for biofuels without taking land away from food production or chopping down forests? Sometimes.

Malawi, in southern Africa, is planting jatropha trees for biodiesel on plantations formerly cultivated for tobacco, according to alternative news agency Panos. Jatrophas – which grow even in poor soil and are touted as a good antidote to erosion – yield a watery rubber when cut.

The biofuel goldrush is also likely to have a knock-on effect on food aid.

Now that U.S. farmers can make good money selling grain to make ethanol, there could be a shift in its policy of giving 99 percent of food aid contributions in goods rather than cash.

It might now actually be more convenient for the United States to buy its food aid allotment elsewhere, food aid expert Clay says.

The United States is the world’s largest food aid donor, but it has come under heavy criticism, especially from Europeans, who say aid in kind distorts local markets, often takes a long time to arrive, and is more expensive to ship than to buy locally.

Bush has been trying to persuade Congress to change the law to allow up to 25 percent of the country’s food aid in cash, but the bill’s been rejected in the past under pressure from farmers who didn’t want to lose what was more or less a subsidy for their grains.

The bill is up before Congress again this year.

For the last few years, the world’s annual food aid donations have been around 10 million tonnes, in line with an international agreement in place since the 1960s for wealthy countries to give at least 5 million tonnes of food annually.

But donations fluctuate depending on prices, and relief organizations are already bracing themselves for a likely drop.

Clay says when food prices last rose in 1995 parts of the world where food aid was used in development projects – like school feeding programmes – were the most vulnerable to cutbacks in 1996.

The same places – Bangladesh, Central America, Eritrea, Ethiopia and North Korea, for example – will probably be first to feel the pinch now.

Stay Engaged

Sign up for The Cornucopia Institute’s eNews and action alerts to stay informed about organic food and farm issues.

"*" indicates required fields

Name*
This field is for validation purposes and should be left unchanged.