Food or Fuel

INTRODUCTION

“Wheat and milk prices have surged to all-time highs while those for corn and soya beans stand at well above their 1990s averages. Rice and coffee have jumped to 10-year record and meat prices have risen recently by up to 50% in some countries.“ The world is gradually losing the buffer that it used to have to protect against big swings [in the market],” says Abdolreza Abbassian, Secretary of the Grains Trading Group at the UN’s Food and Agriculture Organization. “There is a sense of panic. (…) The FAO estimates that those structural new trends will help to push the cost of agricultural commodities in the next decade between 20 and 50% above their last 10-year average. This is a problem for economies where food represents a significant share of their import payments. The International Monetary Fund says higher food prices are hurting poorer nations in Africa, such as Benin and Niger, as well as a number of countries in Asia, from Bangladesh to China itself, and parts of the Middle East.” Financial Times

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“In the near future, demand for agricultural raw materials is likely to continue rising in world markets as countries that have previously been able to meet their own food needs start importing more, increasing the global challenge of feeding populations. Don Mitchell, an economist at the World Bank, says: “Although China and India are relatively self-sufficient in food, some economists doubt that this can continue as incomes rise and [think] that they will need to rely much more on imports.” The FAO expects India to import more wheat and China to increase imports of coarse grains to supply feed to its livestock industry. Both countries are also expected to increase imports of oils that are used in food production, such as palm oil. The World Bank estimates that cereal production will have to rise by nearly 50% and meat output by 85% between 2000 and 2030 to meet projected global demand.” Financial Times

“If prices continue to rise, I would not be surprised if we began to see food riots,” Mr. Diouf (FAO’s director-general) said, noting that in 2006, Mexico, Yemen and Burkina Faso had all witnessed social unrest over high food prices. The FAO’s food price index has risen to its highest level since it began in 1990. Wheat and milk prices reached a record high last summer while other agricultural commodities, such as corn and meat, are trading well above 1990s’ averages. The FAO estimates that low-income, food-importing countries will spend about $28.1B between July 2007 and June 2008 importing staples such as wheat, rice and corn. This represents a 15% rise from the year before and double costs in 2000.” Financial Times

“The global rush to switch from oil to energy derived from plants will drive deforestation, push small farmers off the land and lead to serious food shortages and increased poverty unless carefully managed, says the most comprehensive survey yet completed of energy crops. The United Nations report, compiled by all 30 of the world organization’s agencies, points to crops like palm oil, maize, sugarcane, soya and jatropha. Rich countries want to see these extensively grown for fuel as a way to reduce their own climate-changing emissions. Their production could help stabilize the price of oil, open up new markets and lead to higher commodity prices for the poor.

But the UN urges governments to be wary of their human and environmental impacts, some of which could have irreversible consequences. The report, which predicts winners and losers, will be studied carefully by the emerging multibillion- dollar-a-year biofuel industry which wants to provide as much as 25% of the world’s energy within 20 years.” The Guardian
“More and more people are realizing that there are serious environmental and food security issues involved in biofuels. Climate change is the most serious issue, but you cannot fight climate change by large-scale deforestation,” said Jan van Aken of Greenpeace International in Amsterdam. “Bioenergy provides us with an extraordinary opportunity to address climate change, energy security and rural development. [But] investments need to be planned carefully to avoid generating new environmental and social problems,” said Achim Steiner, Executive Director of UN Environment Program.” The Guardian

“The impact of biofuels on world hunger can be reduced to simple land use mathematics. For example, were we to convert all 179,000,000 hectares of arable land in the US to biofuel production, we might be able to meet much of our present energy needs. We would, however, grow no food, and we would strip our soil even more severely than we have thus far. Worldwide, grain yields are falling (in part due to climate change), and populations are eating their reserves. Meat eating and biofuel production are already raising the price of grain, a cost that adversely affects the poorest people in the world. They already spend 50% or more of their income on food, so the 25% rise in grain prices we are already experiencing means less food in people’s bellies.” Energy Bulletin

“Anyone who tells you that we can run all our cars on biodiesel or ethanol is out of their minds. The issue is simple arithmetic. Lester Brown points out that the average fill up of a 25 gallon SUV gas tank with ethanol will require the same amount of grain as it takes to feed a person for a year. Every person in the US, man, woman and child, uses 500 gallons of gasoline per year. So, that means every American would use enough gas to feed 20 people over the course of a year. There are 300 million people in the US, and 300 million people, each using enough food to feed 20 people to run their cars, would require enough grain to feed 6 billion people. Perhaps that number sounds vaguely familiar. Back in 1999, that was how many people were alive on earth. We’ve added a few since then, of course.” Executive Intelligence Review

“For example, Indonesia, and Malaysia are in the throes of a mad, cartel-led rush to supply palm-oil biodiesel to Europe. In recent years, these two countries accounted for 85% of the world’s supply of crude palm oil – a key part of which met the edible oil component of the Asian diet. But now, there is a diversion to biodiesel. Malaysia has undergone so much deforestation for new palm oil plantations that the nation is considered to have reached its land area limit for cultivated palm. So much new land in Indonesia is going into oil palms, or other biofuel related crops (sugarcane, jatropha), and so much of that is peatland that gigantic clouds of smoke are created as the land is cleared and burned in preparation for palm planting.” Executive Intelligence Review

“An economy based upon a sustainable, small-scale agriculture can both feed the present populace and fuel some of its most essential needs with energy crops. But what we cannot do is transfer the current industrialized, inequitable, amoral system over to biofuel production. We cannot do it because it will cause widespread hunger, because it will increase economic inequity and also because, unless we reduce the fossil fuel inputs required for the growing of most energy crops, we will never be able to grow fuels cheaply and efficiently enough to make a difference in our energy needs.” Executive Intelligence Review

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