Three news items in the space of a few days recently caught my attention. The first was the announcement that the annual World Biofuels Markets Congress will take place this year in Brussels in mid-March. That was followed by extensive coverage of the first biofuel-powered commercial flight courtesy of Virgin Airlines. And shortly after that came news that the UN World Food Programme may have to scale back assistance to poor countries because of a 40 percent rise in world food prices in the last year.
There is a common thread to all three items, and it has to do with food.
The international market price for wheat, corn, soybeans and other food products have all at least doubled in recent years, and in some cases as much as tripled. There have always been fluctuations in global commodity prices due to climate, economics and geopolitics – but this time around there is an important change that is permanent and needs to be addressed urgently by the international community.
The two leading contributors to the current round of increased food prices are fossil fuel and biofuel. Historically high oil prices have dramatically raised the cost of running farm machinery, transporting grain and all other produce, and increased the cost of manufacturing fertilizer. The new factor, however, is biofuel.
The early promise was that only marginal land not currently serving as forest cover or being used for growing food crops would be used to grow biofuel. That myth has been shattered in many ways in many parts of the world, but the US government has typically stepped in with a particularly heavy hand to make matters worse. In the last few years, the US has used subsidies to divert enough domestic corn for bioethanol production that it now constitutes about four percent of the entire global production of coarse grains.
Will the next step be a cartel of biofuel-producing countries? Founding members could be the US and its subsidized farm land, Malaysia and Brazil with their rainforests felled to grow fuel, and Caribbean nations that are putting sugar cane to new use.
Ok, it is not all bad. We do need to reduce our reliance on fossil fuel. And indeed there is a great deal of marginal land that could be used for biofuel. But the process can not be completely market driven when it means that people starve as a direct result. The international community needs to take a serious look at how to manage the whole issue of biofuel production so that it represents a net gain for the planet and not another missed opportunity for clearheaded collective leadership.
Links
Lester Brown - Why Ethanol Production Will Drive World Food Prices Even Higher in 2008
Foreign Affairs / C. Ford Runge and Benjamin Sanauer – How Biofuels Could Starve the Poor
World Biofuels Markets – Annual Congress 12-14 March 2008