The idea of turning farms into fuel plants seemed, for a time, like one of the answers to high global oil prices and supply worries. That strategy reached a zenith last year when the US Congress mandated a five fold increase in the use of biofuels.
But now a backlash is building against policies in America and Europe to promote ethanol and similar fuels, with political leaders in poor countries contending that they are driving up food prices and starving poor people. Biofuels are fast becoming a new flash point in global diplomacy, forcing Western politicians to reconsider their policies, even as they argue that biofuels are only one factor helping to drive up food prices.
The higher prices are sparking riots, political instability and growing worries about feeding the poorest people. Food riots contributed to the dismissal of Haiti’s prime minister last week, and many other countries are nervously trying to calm anxious consumers.
A worker makes an adjustment to a pipe at the construction site of the Biofuels Plc. plant in Teeside, England. Many developing countries blame the use of biofuels for the current food crisis
At a weekend conference in Washington, the world’s economic ministers called for urgent action to deal with the price spikes, and several of them demanded a reconsideration of biofuel policies adopted recently in the West.
Many experts in food policy consider government mandates for biofuels to be ill-advised, agreeing that the diversion of crops into fuel production has contributed to higher prices. But other factors have played big roles, including droughts and rapid global economic growth that has sparked higher food demand.
That growth, much faster over the last four years than the historical norm, is lifting millions of people out of destitution and giving them the means to eat better diets. But farmers are having trouble keeping up with the surge in demand.
Work by the International Food Policy Research Institute, in Washington, suggests that biofuel production accounts for a quarter to a third of the recent increase in global commodity prices. The Food and Agriculture Organization of the United Nations predicted late last year that biofuel production, assuming current mandates continue, would increase food costs by 10-15%.
Ethanol supporters agree that biofuels have been a factor in food price increases, but they maintain that it is relatively small.
“There’s no question that they are a factor, but they are really a smaller factor than other things that are driving up prices,” said Ron Litterer, president of the National Corn Growers Association and an Iowa farmer. He said biofuels were an “easy culprit to blame” because they have grown so rapidly in the last two or three years.
US senator Charles Grassley, a Republican from Iowa, called the recent criticism of ethanol by foreign dignitaries “a big joke.” He questioned why they were not also blaming a drought in Australia that decimated the wheat crop and the growing demand for meat in China and India. “You make ethanol out of corn,” he said. “I bet if I set a bushel of corn in front of any of those delegates, not one of them would eat it.”
The senator’s comments reflect a political reality in Washington, that despite the criticism from abroad, support for ethanol in Washington remains solid.
Representative James McGovern, a Democrat from Massachusetts, said he had come to realize that Congress made a mistake in backing biofuels, not anticipating the impact on food costs. He said Congress needed to reconsider its policy, though he acknowledged that would be difficult.
Global food prices have increased by 83% in the last three years, according to the World Bank. Rice, a staple food for nearly half the world’s population, has been a particular focus of concern in recent weeks, with spiralling prices prompting several countries to impose drastic limits on exports as they try to protect domestic consumers. While grocery prices in the US increased about 5% over the last year, some staple crops like eggs and milk have jumped far more. The federal government is expected to release new statistics on domestic food prices on Wednesday, with notable increases expected.
On Monday, US President George W. Bush ordered that $200 million (Rs800 crore) in emergency food aid be made available to “meet unanticipated food aid needs in Africa and elsewhere,” according to a statement. While White House spokeswoman Dana Perino said Bush had urged his administration to look for additional ways to help poornations tackle food insecurity.
Sceptics have long questioned the value of diverting food crops for fuel, and the grocery and livestock industries vehemently opposed a new energy bill, arguing that it was driving up their costs. A fifth of US corn crop is used to brew ethanol for motor fuel, and as farmers have rushed to plant more corn, they have cut acreage of other crops, particularly soya beans. That, in turn, has contributed to a global shortfall of cooking oil.
The unrest of recent months has intensified the food-vs.-fuel debate. On Friday, for instance, an advisory panel to the European Environment Agency urged the European Union to suspend its goal of having 10% of transport fuel made from biofuel by 2020. Europe’s well-meaning rush to biofuels, the scientists concluded, had produced a slew of harmful ripple effects, from deforestation in Southeast Asia to higher prices for grains.
© 2008/THE NEW YORK TIMES
Elisabeth Rosenthal and Steven R. Weisman contributed to this story.