Thirst for biofuels is driving up world food prices


Spurred by hunger and subsequent anger, food riots and protests are breaking out in poor and wealthy countries across the globe


By Victoria Schlesinger



The skyrocketing cost of food is causing unrest around the world. Last Saturday, Haitians ousted their prime minister, Jacques-Édouard Alexis, following a week of rioting over staple costs. In the Philippines, where the price of rice has doubled since January, the president banned using farmland for any purpose other than food production. Even Italians staged a day-long pasta protest last September when wheat prices jumped.

In the course of a year grain costs have surged by 31% for corn, 74% for rice, 87% for soya, and 130% for wheat, according to the United Nations. Compounding the problem, global grain stores are at a historic low and prices are expected to continue to rise and remain high for the foreseeable future. In response to the growing crisis, the World Food Programme, which feeds some 73 million people, appealed last month for $500 million in funds, the amount it is short this year due to the spike in food prices. And this week, UNESCO released a report that concludes an overhaul of modern agriculture is imminent.

“We estimate that a doubling of food prices over the last three years could potentially push 100 million people in low-income countries deeper into poverty,” World Bank president Robert Zoellick said.

“In this case, the international community has to think about what is the biggest risk in the short run and to make a correct balance between production of biofuel from food stuffs and biofuel coming from nonfood stuffs,” IMF managing director Dominique Strauss-Kahn said during a press conference in DC last Sunday at the spring meetings of the IMF and the World Bank April 12-13.

Scrambling to determine what can be done about the situation and how we got here, experts have begun pointing fingers. The culprits include high oil prices, increasing demand for just about every resource from China and India, and failed crops due to drought. One of the primary perpetrators is biofuels—widely considered one of the few factors we have control over given US and European policy drive the new market.

Last December, biofuels secured their future in the US through the energy bill, which requires the US to use 36 billion gallons of the crop-based fuel by 2022. Congress clamored to support the measure, proposed by President Bush, as a partial remedy to climate change and dependence on foreign oil.

But an increasing number of studies show that America’s thirst for biofuels is a significant contributor to the problem. According to the International Monetary Fund (IMF), the plant-based fuels are responsible for almost half the increase in the demand for food crops.

“I listened to some Ministers during these two days," said Strauss-Kahn, "who are very, very strongly against this kind of thing, talking about crime against humanity using foodstuff to produce biofuels.”

According to Oxfam America’s policy director, Gawain Kripke, “Most economists agree that reducing the conversion of food to fuel would make more food available and that would make prices go down.”

Biofuels are so tied to politics in the US—particularly during a presidential election year when votes in farm states such as Iowa can make or break a campaign—that extracting them from policy seems daunting. For example, in addition to the energy bill, Congress is scheduled to complete debates today on the 2007 Farm Bill, which could include some $2 billion to support biofuels. About half of that would go to developing fuels that aren’t grain-based, like those made from switch grass.

Supporters of biofuel say these next-generation sources could help meet increasing global demand and reduce pressure on food crops. World Resources Institute economist Elizabeth Marshall says the farm bill research funds are step in the right direction toward encouraging breakthroughs in cellulosic ethanol technology. “The food and land conversion issues have been at a slow simmer for awhile, and biofuels brought them to a boil. They’re exacerbating systemic problems.” 

While that may be true, even some members of Congress are beginning to regret their support for biofuels. Massachusetts Congressman Jim McGovern told The New York Times recently that he now thought biofuels were a bad bet: “If there was a secret vote, there is a pretty large number of people who would like to reassess what we are doing.”

Given that food prices will not fall anytime soon, it seems that reassessing biofuels is unavoidable. Kripke says, “This issue is coming out in discussion and there are beginning to be members of Congress, humanitarian organizations like Oxfam, and some industries, like the food industry, which are becoming very concerned about their food prices going up, beginning to call for a revaluation of biofuels. It’s definitely becoming an issue, although it has been slow to come."

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Actually the world's growing appetite for animal flesh consumes far more grain than the ethanol industry does. That being said, corn kernel based ethanol production is antique technology and will soon be phased out. Cellulosic ethanol (CE) is the fuel of the very near future. CE can be produced from non-edible agricultural waste such as corn cobs and corn stalks, wheat straw, wood and forestry waste and non-edible plant species that will grow on marginal land that cannot support food crops.

Just to keep things in perspective:

Total U.S. Corn Production:

~10% used for direct human consumption

~90% used for livestock feed

"We grow animal feed, not human food in the United States," [Dr Bruce] Dale said. "We could feed the country's population with 25 million acres of crop land, and we currently have 500 million acres. Most of our agricultural land is being used to grow animal feed."

Here

"Ethanol production has been linked to a rise in the price of everything from tortillas to gummi bears. Unfortunately, this argument is very nearly ridiculous. The fact is that very little U.S. corn (about 10 percent) is fed directly to people; most of it is fed to animals." -- Dr Bruce Dale, Professor of Chemical Engineering, Michigan State University

Here

CV and Contact Page for Dr Dale Here

* * * * * * * *

Diets are changing radically in nations such as China, India, Brazil and Russia, where economic growth has boosted meat consumption. In China, it is up by 150 per cent since 1980. In India, it has risen by 40 per cent in the past 15 years. The demand for meat from across all developing countries has doubled since 1980.

Because cattle and chickens are fed on corn -- it takes 8kg of grain to produce 1kg of beef -- the price has risen.

Here

* * * * * * * *

Startup Says It Can Make Ethanol for $1 a Gallon, and Without Corn

24 January 2008

A biofuel startup in Illinois can make ethanol from just about anything organic for less than $1 per gallon, and it wouldn't interfere with food supplies, company officials said.

....May Wu, an environmental scientist at Argonne National Laboratory, says Coskata's ethanol produces 84 percent less greenhouse gas than fossil fuel even after accounting for the energy needed to produce and transport the feedstock. It also generates 7.7 times more energy than is required to produce it. Corn ethanol typically generates 1.3 times more energy than is used producing it.

Here

* * * * * * * *

New Method Rapidly Produces Low-Cost Biofuels from Wood, Grass

Wed 09 Apr 2008

George Huber of the University of Massachusetts Amherst....is making biofuels from cellulose, the non-edible portion of plant biomass and a major component of grasses and wood. At $10 to $30 per barrel of oil energy equivalent, cellulosic biomass is significantly cheaper than crude oil. The U.S. could potentially produce 1.3 billion dry tons of cellulosic biomass per year, which has the energy content of four billion barrels of crude oil. That's more than half of the seven billion barrels of crude oil consumed in our country each year.

Here

* * * * * * * *

FACTS:
· Over the past year, oil prices have jumped by nearly 100%.
· In 2007, food prices increased by about 4% overall.
· In 2007, the same year the U.S. produced a record amount of ethanol from corn,
the U.S. increased it surplus of corn to more than 1.4 billion bushels. In a record
ethanol year, the U.S. actually fed more of the world by increasing its exports of
corn by 6%.
· Food marketing costs now account for 80% of the cost of food. Marketing costs
are the difference between the farm value and consumer spending for food at
grocery stores and restaurants.
· Corn accounts for less than 5% of the price a box of corn flakes.
· The price of rice is now up 77% since October. Rice is not used is the
production of biofuels. Corn for ethanol cannot be grown in rice paddies.
· As a whole, fish prices are up. Fuel prices account for approximately 60%-70%
of operating costs of fishermen. Fish are not used in the production of biofuels.
· An increasing amount of biofuels are produced from nontraditional feedstocks
such as waste products from the beverage, food, and forestry industries. In the
very near future, biofuels will be produced from agricultural residues such as
grain straw, sugarcane bagasse, corn stover, municipal solid waste, and energy
crops such as switchgrass and algae.

Saturday, The Toronto Star

Defeating OPEC, one ear of sustainable corn at a time; Building cars that use alternative fuel would break monopoly that the oil cartel currently holds
The Toronto Star
Saturday, April 19, 2008
Page: AA06
Section: Opinion
Byline: Robert Zubrin

The most oppressive force in the world today is the OPEC oil cartel.

Distributed elsewhere, the $1.3-trillion per year taxed out of the world economy by OPEC countries could lift the entire Third World out of poverty.

Based on current oil prices and export levels, Saudi Arabia will make more on oil this week than the 60 poorest countries on Earth will make all year.

Breaking the cartel would thus be a great act of social justice and of critical value to the world's poor. But there's only one way to do it - by creating fuel choice.

OPEC cannot be defeated by conservation alone. A global boycott of oil is, frankly, impossible. And even in a fantastical scenario in which all the consuming nations got together and agreed on quotas for cutting their oil consumption, and then actually complied, OPEC could counter simply by cutting supply. So long as it is the only game in town, it wins.

What is needed is for the United States Congress to pass a law requiring that all new cars sold (not just made, but sold) in the United States be flex- fuelled - that is, be able to run on any combination of gasoline or alcohol fuels, including E85, which is a mix of 85 per cent ethanol and 15 per cent gasoline.

Such cars already exist.

Two dozen models of flex-fuelled vehicles (FFVs) are being produced by Detroit's Big Three this year - including plants in Ontario - and they only cost about $100 more than identical models that can run on gasoline only.

Right now there is little incentive for consumers to own a flex-fuel vehicle (alcohol fuel pumps are nearly as rare as unicorns) and there is little incentive for gas-station owners to dedicate a pump to alcohol fuels (FFVs comprise only about 3 per cent of the new-car market).

But within three years of the enactment of an FFV mandate, there would be 50 million cars on North American roads capable of running on high-alcohol fuels. E85 pumps would be everywhere. And for the first time, OPEC nations would come face-to-face with something utterly foreign to them: Competition.

By mandating that all new cars sold in the U. S. have flex-fuel capacity, Congress would also induce all foreign auto makers who want access to the American market to produce FFVs as well, effectively making flex fuel the international standard.

In addition to the 50 million FFVs we'd see in the U.S. in three years, there would be hundreds of millions more worldwide that could be powered by any number of alternative fuels, forcing gasoline to compete against methanol and ethanol, fuels that can be made in any number of ways.

Methanol, for example, can be made from any kind of biomass without exception, as well as from coal, natural gas and recycled urban trash.

Ethanol can currently be made from a wide variety of starchy or sugar-rich crops, but new means of making it are on the way, which will radically expand its resource base to include many kinds of crop residues and weeds that have no food value.

By making our cars compatible with such fuels, we will enormously expand and diversify the options for growth in the Third World. This would effectively break the monopoly that the oil cartel currently holds on the world's fuel supply.

It would also foster sustainable Third World development. We could take a trillion dollars a year - which is currently flowing to the oil cartel - and direct it towards the world's agricultural sector instead.

With about 30 per cent of American farmland currently being used, and only 15 per cent of the arable land in the developing world, the amount of untapped biomass potential on existing agricultural land is exceedingly high, and with no negative effect on food supply or rain forests.

Certain opponents allege that ethanol's production from corn takes away from the food supply, and that large irrigation requirements draw power that exceeds that provided by the ethanol.

Such analyses, however, have been discredited. When ethanol is made from corn, all of the protein in the corn is preserved for use as animal feeds, and virtually no ethanol corn crop grown in the United States requires irrigation. In fact, for the expenditure of a given amount of petroleum, nearly 10 times as much ethanol can be produced as gasoline.

A variety of people have been quick to blame biofuels for the recent rise in world food prices. Despite its corn ethanol program, U.S. corn exports have continued to increase in recent years, and overall agricultural exports this year are up over 23 per cent.

So it is not corn ethanol that is driving up global food prices, including those for fish, rice, fruit, and other agricultural crops. Rather it is high fuel costs, which have been rising at an average rate of 30 per cent per year for the past nine years due to vicious OPEC price rigging.

The time has come to take the world off the petroleum standard and onto the alcohol standard. Only in this way can we release the planet from OPEC's stranglehold. Only in this way can we redirect funds to deal seriously with the crushing problem of global poverty. Only in this way can we transfer control of the future from those who take their wealth, pre-made, from the ground, to those who make their wealth through hard work, skill and creativity - and a concern for the future good of humanity.

Robert Zubrin is president of Pioneer Astronautics and author of Energy Victory: Winning the War on Terror by Breaking Free of Oil. energyvictory.net

© 2008 Torstar Corporation

http://www.thestar.com/printArticle/416066

Regarding the issue of food prices and the role od biofuels, it is certain that they did play a role, but there is also the raising demand and foremost the people out there that smell money, with food shortages. These are the speculators, which may well be responsible for some 50% of the price increases.

Lionel Grant, agreeing with Zubrin, since he is forwarding his opinion article, blames the prices on OPEC and also that the problem is not biofuels (his facts). The facts really do contradict him, at least partly.

The real issue is that crude oil is still way to cheap, The gallon of fuel should at least be US $ 8, and maybe above ( that price should be kept a such a level via taxes if needed, the proceed going to the poorer segment of the population, to pay for public transport, new small and fuel efficient cars). That is the only way people will get the message that SUVs are not needed and that the world belongs to all and so there is a need to become more frugal in the North, to allow for the rest of the 2/3 of the world's population to also enjoy the benefits of the natural resources that no one can really and honestly claim and grab for themselves.

For some sobering reading on the issue of food, hunger, poverty, health, rural livelihoods and the environment, in the face of challenges such as land degradation, climate change, growing population and water scarcity, I recommend anyone to check out:

http://www.agassessment.org/

I had the privilege to co-chair the first assessment of agricultural science and technology for development over the past 4 years, and the report from 400 authors can be found on the above mentioned website. Please take a look and think of the challenges we have ahead of us. Business as usual, as recommended by Lionel Grant, blaming problems on OPEC and simply suggesting that we switch to ethanol (from any source) while continuing the consumerism, is simply not possible...and uterly irresponsible.

Its time for the wake up call, change the way we do things and start minding not only what our generation does, but also what we are leaving behind for the generations to come, and this across the globe, not only in the local suburb......

Hans R Herrem, 1995 World Food Prize Laureate

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