Eat it
July 5, 2008 6:48 AM   Subscribe

Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian.
President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that: "Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases."

Even successive droughts in Australia, calculates the report, have had a marginal impact. Instead, it argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices.
posted by Kirth Gerson (66 comments total) 7 users marked this as a favorite
 
Hey, it sure is better than farm subsides! ohh wait..
posted by jeffburdges at 7:05 AM on July 5, 2008 [2 favorites]


We'll just have to adapt our digestive system to process diesel.
posted by RobotVoodooPower at 7:06 AM on July 5, 2008 [2 favorites]


I'm aware the piece is almost as much opinion as fact, but seriously, who didn't see this coming?
posted by recoveringsophist at 7:20 AM on July 5, 2008


I run on piss & vinegar, so I guess I'm partly to blame.
posted by Mister_A at 7:31 AM on July 5, 2008


We'll just have to adapt our digestive system to process diesel.

We are already equipped to process biodiesel.
posted by ackptui at 7:31 AM on July 5, 2008


Not to mention how well we run on ethanol.
posted by ackptui at 7:32 AM on July 5, 2008 [1 favorite]


W just got his talking points mixed up again. India and China are the reason fuel prices are so high. It is tough having to have all those things mixed up in his brain. At least he didn't blame it on Iran.
posted by birdherder at 7:39 AM on July 5, 2008 [2 favorites]


We have to end our dependence on Foreign Food.
posted by Fuzzy Monster at 7:52 AM on July 5, 2008 [4 favorites]


Yeah, after I stopped being all excited, it wasn't hard to realize that biofuels were always a bad idea, especially with the whole corn! corn! corn! mentality we have going on. Even if you change over to switch grass and use up land unsuitable for crops to feed folks, you're still pumping out carbon dioxide.

Inasmuch as I do not relish changing our infrastructure, I think we'll be pretty well done with pourable hydrocarbons as fuel for our car. It's a nice dream, but it doesn't seem too feasible. Maybe if we had some kind of nuclear power plant juicing up the CO2 absorbers previously mentioned, sucking in some water and pouring out gasoline as the end product.
posted by adipocere at 7:52 AM on July 5, 2008


Ah very timely post - many thanks! I've recently been pushing through two papers on this very same subject.

First of all, in "Bursting the Biofuel Bubble: Comparative Dynamics of Transitions to Freedom from Oil" Kurdusiewicz & Wandesforde-Smith (2008) have argued that The World Bank kicked off this entire mess back in 2005. . A brief excerpt:

"The remarkable recent surge of interest in biofuels, we argue, can be traced to the publication of a World Bank report in 2005, highlighting the contribution biofuels might make to meeting needs for transportation fuels, as well as to development in countries growing feedstocks.".

Kurdusiewicz & Wandesforde-Smith also believe many governments have now lost enthusiasm for biofuels: '“The policy on biofuels,” as a British government official put it bluntly and with clearly implied disapproval in June 2007, “is currently running ahead of the science.”'

Full citation:Wandesforde-Smith, G., Kurdusiewicz, I., March 2008 , "Bursting the Biofuel Bubble: Comparative Dynamics of Transitions to Freedom from Oil"


Another paper I've recently found very interesting was authored by de Gorter & Just (2008), "The Law of Unintended Consequences: How the U.S. Biofuel Tax Credit with a Mandate Subsidizes Oil Consumption and Has No Impact on Ethanol Consumption".

de Gorter & Just argue that the "U.S. policy of ethanol tax credits designed to reduce oil consumption does the exact opposite. A tax credit is a direct gasoline consumption subsidy ..." and further go on to opine "A tax credit is therefore a pure waste as it ... fails to reduce the tax costs of farm subsidy programs but generates an increase in the oil price and hence wealth in Middle East countries."

Full citation: de Gorter, Harry and Just, David R., "The Law of Unintended Consequences: How the U.S. Biofuel Tax Credit with a Mandate Subsidizes Oil Consumption and Has No Impact on Ethanol Consumption" (February 1, 2008). Cornell University Working Paper No. 2007-20

So I guess I'm not surprised to see The World Bank come out so strongly against biofuels; after all, they kicked this entire thing off, didn't think it through too clearly, and now they're trying to put the genie back into the bottle. But as these policy changes presented a classic market opp, lots of folks that invested significant amounts of money into this, fully knowing how big a bubble would result.

They haven't been disappointed, but it will be interesting to see how hard the various agents fight any retrenchment from biofuels.
posted by Mutant at 7:56 AM on July 5, 2008 [2 favorites]


I think that biofuels take up less acreage than feed for livestock does. But I can't be bothered to look right now.
posted by MNDZ at 7:58 AM on July 5, 2008


Hey, it sure is better than farm subsides!

It's beyond me to wrap my head around all this. Gasoline is expensive, so we start cutting it with biofuel. Americans use ethanol. Corn ethanol is inefficient and wasteful compared to ethanol from sugar cane, but that's okay, because corn is cheap. But corn only looks cheap, because the price tag ignores the tax money that goes into subsidies. And since we're using so much corn, it's become expensive again. Oh, and apparently developing nations starve to death.

Is it really such political poison to point out how crazy this all is? Couldn't we cut the subsidies gradually, and encourage those farmers in Iowa to grow something else?
posted by Garak at 8:05 AM on July 5, 2008


Garak -- "But corn only looks cheap, because the price tag ignores the tax money that goes into subsidies. And since we're using so much corn, it's become expensive again. Oh, and apparently developing nations starve to death."

And, as de Gorter & Just argue, these subsidies actually increase the price of oil.
posted by Mutant at 8:12 AM on July 5, 2008


People knew that corn-based ethanol was a loser before they ever even considered encouraging its use. I'm not sure what it was--some sort of desperate attempt by government agencies to look like they weren't impotent, I guess.

Oh well. What's the next method to postpone the inevitable?
posted by sonic meat machine at 8:20 AM on July 5, 2008


some sort of desperate attempt by government agencies to look like they weren't impotent

I'd say it was excitement by ag companies to jump on the buzzword bandwagon. One of the most poisonous phrases in American politics is "new opportunity."
posted by Michael Roberts at 8:42 AM on July 5, 2008


Corn farmers have tremendous pull...

It really is amazing to me how often capitalism combined with the US govt always seems to find the most wasteful, inefficient, costly (in both money and people's lives), and downright backward way to do things. But hey, as long as someone's making money, who cares if we creep ever closer to total moral bankruptcy?
posted by nevercalm at 8:43 AM on July 5, 2008 [1 favorite]


I call BS. Who eats algae?
posted by DU at 8:52 AM on July 5, 2008


Who's in favor of this crap besides corn farmers?

Unfortunately, Barack Obama. (See for instance the mention of working for a tax credit on installing E85 pumps in gas stations.) One of the few issues where I disagree with him. But then again I can't tell how much he'd work for corn ethanol if elected president. I think he's smart enough to realize that it's not a good path for taxpayer money.

Also, I can't tell if this link is behind a firewall, but this Economist article gives a pretty good rundown of the food situation at the end of 2007. According to it, world grain stocks are set to decline by 53 million tons this year. (Total grain stocks are at between 400 and 500 million tons IIRC.) Of the 53 million tons, 30 million is due to ethanol subsidies. The rest is presumably due to increased demand, mostly in China and India.
posted by A dead Quaker at 9:01 AM on July 5, 2008


And who really cares that the US is getting significantly more money for their corn products while creating ethanol? I say that once oil is back down to 50 per barrel then we start feeding the world again.....they are screwing with us....we screw with them....or "Let them eat OIL"
posted by malter51 at 9:05 AM on July 5, 2008 [1 favorite]


I call B.S. How many cars are there that use E85 on the road right now? How many E85 stations? The 10% to 15% added to gas as an oxidizer may have added some of the price increase, but that ethanol has been added for a number of years, so why the sudden jump?
posted by Gungho at 9:12 AM on July 5, 2008


I say that once oil is back down to 50 per barrel...

What evidence, if any, do you have that this is expected to happen? (And projections from CERA - aka "Daniel Yergin's market cheerleaders" - don't count. )

...they are screwing with us....we screw with them...

Because trade wars over oil and food always work out so nicely, aren't ethically questionable in the slightest, and have absolutely no possibilities for blowback.
posted by Bora Horza Gobuchul at 9:21 AM on July 5, 2008 [1 favorite]


The World Bank kicked off this entire mess back in 2005

Now, now. Don't be too hard on The World Bank. When have they given bad advice before?

Who's in favor of this crap besides corn farmers?

Unfortunately, Barack Obama.


Maybe it's wrong for me to blame this on Iowa, but I wonder if this would be anywhere near the issue that it is if it wasn't the first primary state. I think the process overall has some benefits, but this is a downside.
posted by weston at 9:25 AM on July 5, 2008 [1 favorite]


Not starving half the world aside. A negative energy return isn't necessarily a reason to not create bio diesel.

If only fossil fuel is used to raise and process the corn, then yes obviously there wouldn't be a point. However, as more electricity sources come from non-fossil sources you approach a point where creating bio diesel will lessen your dependence on fossil sources, which is the ultimate goal.

As algae based diesel and ethanol technologies mature the energy companies will switch because of cost. We just need to make sure the government corn subsidies end.

Energy storage (batteries and hydrogen), non-fossil electrical generation and efficiency are all making enormous strides, we will have the ability to go energy independent in less than 2 decades. What we need is a president with the will to make this happen.

Imagine no more oil wars. We'll be able to save our military resources for the upcoming fresh water wars.

And hey how about that global warming? That shit might become a problem. The New Energy (if done properly) should be less dependent on fossils and that will lower carbon emissions.

And that brings me back to starving half the world. I'm going to go out on a limb here and say I'm against that. There are some terrible inefficiencies in the global food system right now. I wonder what would happen to food prices if every American agreed to skip meat once a week. I'm sure the invisible hand of the market will force some of these efficiencies (price of gas goes up, people drive less. Price of food goes up, people eat cheaper foods) but in the short term we need keep a watch on these poorer countries and help them cope as best as we can.

Food riots are bad for everyone.
posted by Bonzai at 9:31 AM on July 5, 2008


It's somehow fitting that corn can be used equally well in gas tanks or bottles of soda and snack food (as High Fructose Corn Syrup). It's as if all the evil of the world comes together at the local gas station.
posted by stbalbach at 9:31 AM on July 5, 2008 [3 favorites]


How many cars are there that use E85 on the road right now? How many E85 stations?

There are several stations within a close drive of my house, but I'm in Minnesota where there's corn growing not far off. Some numbers, more background. Some of the subsidies and projects here easily go back two decades or more. Factoids: Minnesota used to consume all the ethanol it made. Since 2000, it's become a net exporter, by 2006 Minnesota exported as much ethanol as it consumed (see linked graph), while local consumption stayed flat.

In 2006, we had a tight, tight race for governor. Just a couple of days before the election, the DFL candidate for lieutenant governor (that's Democratic, to you out-of-staters) made a snarky reply to a reporter who was asking her about E85 subsidies. It was a rushed, bad moment, but the spin ended up being that the DFL ticket "doesn't know about ethanol". There was no time to recover in the campaign--that and a couple of other missteps led to the DFL losing the election by a hair to our current, terrible Republican guy.

The metanarrative: do not get on the bad side of the farm vote.
posted by gimonca at 9:32 AM on July 5, 2008


This is all a big surprise. Right?
posted by adamvasco at 9:33 AM on July 5, 2008


Gungho:

I don't have all the figures handy, but from 2001 to 2007, the amount of US corn used for ethanol production has gone from about 7% to 17%

Ethanol fuel and biodisel usage is rising very quickly all over the world. With such large amounts of food stocks being used to produce fuel, the price can only go up.

What's going to make this much much worse is that with the yearly yield of an acre planted with corn, you can fill up your Ford Explorer only twice.
posted by Djinh at 9:37 AM on July 5, 2008


How will this affect my investments in Frozen Concentrated Orange Juice?
posted by Saxon Kane at 9:57 AM on July 5, 2008


To get that 75%, they did wrap in speculation:
It argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.
So, those first two factors are actual supply and demand, but that third factor could be reduced if we didn't have all this spare capital sloshing around creating bubble after bubble. Correct me if I'm wrong here. Is there some way to keep the expectation of profit from raising the actual prices of food commodities on ethical grounds? Housing was bad enough. Also, this is why we cannot privatize water.
posted by salvia at 10:08 AM on July 5, 2008 [2 favorites]


It really is amazing to me how often capitalism combined with the US govt always seems to find the most wasteful, inefficient, costly (in both money and people's lives), and downright backward way to do things.

I'm not sure how the economic system impacts this - congress told farmers to grow amazing amounts of corn (to burn, not to eat) - which the farmers then did. And they grew less food, resulting in this shortage of food.

Are you suggesting that congress should simply have set quotas for every kind of food produced in the U.S.?
posted by yath at 10:10 AM on July 5, 2008


One thing I don't get about this whole issue is why developing countries aren't getting a huge boost out of this. Bob Geldof told me that the reason Africa remains impoverished is that Western agriculture subsides prevents rural farmers from getting a fair price for their produce. Shouldn't the recent price increase disproportionately help farmers?
posted by Popular Ethics at 10:14 AM on July 5, 2008


In 100 years, our civilization has gone from burning a little bit of fuel to make lots of food, to burning lots of food to make a little bit of fuel.

That's actually quite ominous, if you think about it.
posted by Avenger at 10:14 AM on July 5, 2008 [8 favorites]


Here's an idea: stop consuming so much fuel and walk or bike.
posted by kldickson at 10:17 AM on July 5, 2008 [3 favorites]


Here's an idea: stop consuming so much fuel and walk or bike.

Oh shut up hippy.
posted by Bonzai at 10:21 AM on July 5, 2008 [1 favorite]


"President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that"

Ah, c'mon, it's not like President Bush gets things wrong. I mean, he was correctly dismissed the fear-mongering about gas pricesw rising to $4 a gallon. And he found those WMDs in Iraq.
posted by orthogonality at 10:29 AM on July 5, 2008


i call further BS. First of all, people in US don't eat corn (not in large quanities, anyway), we use corn for animal feed. Second, when ethanol is made, the protein in the corn seed germ is not thrown away, instead you get two-three products depending on the type of ethanol production facility it is: ethanol, dry distiller grain (which is a very high quality animal feed - eminently more digestible than plan corn which ferments in cows stomaches in large quantities), and corn oil. Making ethanol doesn't take feed out of the mouth of animals at all.
posted by zia at 10:47 AM on July 5, 2008


I was going to post some more about biodiesel and food costs, but realized I had written a bit about it in the sierra leone biodiesel thread.

In short, i can say my piece that biofuel/corn/ethanol is a very backwards approach to the fuel issue, as it was probably thought up by people as a way to prop up the corn agribusiness and make money for a few people, not to provide green solutions. However on the surface it appeals to some less informed, but want to do something good, types.

Algae harvesting for biodiesel production has a lot more going for it (not to mention allow us to capture carbon with with, using them as air scrubbers), but I don't see a consortium of algae farms and sewage treatment plant operators having the same lobbying power as the industrial agro business.
posted by mrzarquon at 10:57 AM on July 5, 2008


people in US don't eat corn (not in large quanities, anyway)

"Soda And Sweet Drinks Are The Main Source Of Calories In American Diet"

Fortuitously, I have a can of Coke sitting next to me. The only thing on the ingredients list that has any calories is High Fructose Corn Syrup (although Natural Flavors looks suspicious).
posted by synaesthetichaze at 12:01 PM on July 5, 2008


I don't see a consortium of algae farms and sewage treatment plant operators having the same lobbying power as the industrial agro business.

Boeing Throws its Weight Behind Algae. Dunno where this will go but Boeing definitely has lobbying power.

Personally I've always suspected that one contributing element to E85 promotion in the U.S. was that Detroit never put any resources into developing modern turbo diesel engines and electric/fuel cell cars are still vaporware so E85 was something they could associate their existing powerplants w/ as being "green" with virtually no R&D resources on their part. I live in central Ohio, a major corn producer, and I know of exactly one E85 pump. You really can't even buy E85 anywhere in the city so I don't know where this stuff is going unless it is exports.
posted by well_balanced at 12:10 PM on July 5, 2008


Theres plenty of E85 pumps round here in Minnesota, wb, too bad the fuel might not even be net energy positive, from what i've read. Corn farmers sure like the subsidies though amirite?
posted by no_moniker at 12:34 PM on July 5, 2008


DU - I call BS. Who eats algae?

Well, I had a big bowl of Chlorella ramen for lunch just now.
posted by porpoise at 12:59 PM on July 5, 2008


If only fossil fuel is used to raise and process the corn, then yes obviously there wouldn't be a point. However, as more electricity sources come from non-fossil sources you approach a point where creating bio diesel will lessen your dependence on fossil sources, which is the ultimate goal.

The energy inputs to create fuel from from plants are generally not electric. Fertilizer is made from natural gas and tractors, trucks, etc. run on diesel.
posted by ssg at 1:04 PM on July 5, 2008


I say that once oil is back down to 50 per barrel

The only way that will ever happen is if oil gets supplanted as a transportation fuel, and I don't think biofuels are going to do that.
posted by adamdschneider at 1:24 PM on July 5, 2008


unnamed sources quoting inflated statistics in the guardian? OMG!111!!!
posted by sexyrobot at 1:49 PM on July 5, 2008


people in US don't eat corn (not in large quanities, anyway)

Of course they do. It's just so processed they don't know it. The difference between what most Americans eat and animal feed is that they have to do more tricks with texture and put it in a prettier trough.

I challenge you to eat anything processed that DOESN'T contain corn. Or soy.
posted by Naberius at 2:33 PM on July 5, 2008


Is there some way to keep the expectation of profit from raising the actual prices of food commodities on ethical grounds?

Speculative practices which raised the price of food were illegal for centuries, until some 18th century guys argued that the market could regulate itself just fine.
posted by jb at 2:41 PM on July 5, 2008 [1 favorite]


Even if you change over to switch grass and use up land unsuitable for crops to feed folks, you're still pumping out carbon dioxide.

Let's not throw the baby out with bathwater here. Fossil fuels add to the net gain of free floating carbon since you're dredging it up from a stored place. Carbon from biofuels that are released have been stored for a couple of months(maybe)?

So that is hardly a point to argue against biofuels.
posted by P.o.B. at 2:49 PM on July 5, 2008


I challenge you to eat anything processed that DOESN'T contain corn. Or soy.

Who wants to eat processed foods, though? They taste terrible.
posted by jrockway at 3:14 PM on July 5, 2008


Who wants to eat processed foods, though? They taste terrible.

Totally. I make every single thing I eat from scratch too. Particularly my bread, jam, ice cream, and beer. Also, I never eat out.
posted by salvia at 3:32 PM on July 5, 2008


Growing corn for biofuel is fucking retarded. You have to put way more energy into it than you get out of it.

Ok, as one of those "uninformed" people who are trying to help, I've had a number of questions about this that don't ever seem to be answered in any kind of rigorous way. To me this seems like the exact kind of thing that liberal psuedo-intellectuals fall for, I just haven't seen the evidence laid out in any convincing manner.

1) Can anyone point me to a link where they discuss how corn ethanol requires "way more" energy to produce than you get out of it? I've heard this alot and it seems to be adopted as common knowledge but I have yet to see it explained in a detailed manner. What kinds of "energy" are we considering here?

2) Why oh why doesn't this article mention rising energy prices as a possible source for rising food prices? This seems to me to be the primary #1 reason. Why would the fact that american farmers decided to make their corn into ethanol change the price of rice in east asia? The question is not how much corn we in america eat, it's how much corn people in Haiti, or Africa, or Southeast asia eat?

3) While I have read some studies about how making more ethanol in fact increases CO2 emissions (through increased land clearing in Brazil to make up for the lack of food) on the short term (100 years), I would be curious to know if anyone has calculated the CO2 impact of burning a gallon of ethanol vs. burning a gallon of gasoline. It seems while we are vilifying ethanol, what is the alternative? Isn't burning more gasoline just going to raise food prices as well?

This is a very complex issue, so don't take some study which simplifies the problem as the whole truth. Don't fall for things which make great media stories -- "Ethanol is a sham" because there is usually more to it. Anyhow, my mind is open, I'd like to hear from anyone who has rigorous explanations to these questions or know where I can go to find them.
posted by spaceviking at 4:58 PM on July 5, 2008


1) Ethanol Production Consumes Six Units Of Energy To Produce Just One
Recently, Patzek published a fifty-page study on the subject in the journal Critical Reviews in Plant Science. This time, he factored in the myriad energy inputs required by industrial agriculture, from the amount of fuel used to produce fertilizers and corn seeds to the transportation and wastewater disposal costs. All told, he believes that the cumulative energy consumed in corn farming and ethanol production is six times greater than what the end product provides your car engine in terms of power.
Also 1) Ethanol Fuel from Corn Faulted as ‘Unsustainable Subsidized Food Burning’
Adding up the energy costs of corn production and its conversion to ethanol, 131,000 BTUs are needed to make 1 gallon of ethanol. One gallon of ethanol has an energy value of only 77,000 BTU. "Put another way", Pimentel says, "about 70 percent more energy is required to produce ethanol than the energy that actually is in ethanol. Every time you make 1 gallon of ethanol, there is a net energy loss of 54,000 BTU".
2) "The report estimates that higher energy and fertiliser prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period."

3) Alternatives to Traditional Transportation Fuels ... Greenhouse Gas Emissions
Total Fuel Cycle Greenhouse Gas Emissions From Gasoline and Alternative Transportation Fuels - Unweighted millimoles per Vehicle Mile Traveled:
Carbon Dioxide (CO2): Gasoline: 7,900; Ethanol From Corn: 7,400
That looks OK, but when you scroll down to the bar graph (Figure ES1) in the summary, Ethanol releases more CO2 per vehicle mile than any of the other fuels. It looks like they're factoring in CO2 from production to get that, but somebody more versed in this stuff could say for sure.

There's also this note: "Ethanol from corn produces the largest nitrous oxide emissions across the total fuel cycle."
posted by Kirth Gerson at 6:25 PM on July 5, 2008


Thanks, this is exactly what I was looking for.
posted by spaceviking at 6:36 PM on July 5, 2008


But for #3 -- CO2 emissions from Ethanol are not from buried sources -- so they should be a net zero as a greenhouse emission. I'll read the report to see if this is factored in.
posted by spaceviking at 6:39 PM on July 5, 2008


You know who else is really hurt by high prices for corn?

That's right, ethanol producers.
posted by sfenders at 7:07 PM on July 5, 2008


according to a confidential World Bank report obtained by the Guardian.

Someones got some 'splaining to do.
posted by oxford blue at 9:07 PM on July 5, 2008


spaceviking, since corn is grown using fossil-fuel fertilizers, an "awful lot" (for some value of awful lot) of the carbon in the corn isn't coming out of the atmosphere. So biodiesel from conventional agriculture isn't net zero CO2. I don't know what the ratio is, but that's where #3 comes from.

One of the reasons algae biodiesel is better is that algae just grows using atmospheric CO2, so it is net zero. I suppose you'd do just as well if you could get conventional or near-conventional yields on corn without fossil fuels -- but that ain't happening any time soon, unfortunately. I suppose it would entail liquefaction of organic garbage, and if that were practical we'd probably just be running our cars on the garbage.
posted by Michael Roberts at 9:38 PM on July 5, 2008


the debate on ethanol taking more energy to create than produce is not over
http://www.treehugger.com/files/2006/03/final_word_on_e.php

The difference depend on efficiencies in the technology which is used to process the ethanol (which is changing fast).

Some studies are quoting processing efficiencies where energy to process the corn is gathered from coal burning plants from the 70s. So is the answer to stop creating ethanol? or to improve the energy sources to process it?

Don't throw the baby out with the bathwater. Changing to a different fuel source today isn't realistic. Ethanol is a stop-gap measure which can work for a few decades while other infrastructures come into play. And it is working well for Brazil!

However, this article isn't about ethanol, it's about the cost of food.
1) the cost of food related to biofuels is increasing due to speculators - it's part of the current 'energy bubble'
2) disease and storms decimated major rice crop yeilds this year, resulting in lack of supply which of course will increase prices.
3) seems that Asia and Africa are the main regions facing food shortages (over-population anybody?), and those regions don't eat corn - corn is only eaten in the Americas & by obese societies (developed countries, obese as a result of eating vast amounts of corn syrup).
posted by pedalpete at 10:46 PM on July 5, 2008


You can argue as much as like about the efficiency of of corn ethanol vs fossil fuel. What is being pointed out in the FPP is that taking land out of production for human foodstuffs and using it for ethanol producing crops is pushing up the price of food for much of the worlds population. What makes this worse is that in many cases the crop in question is the same, just that the end use is different; and this in the case of US corn growers is government subsidized.
posted by adamvasco at 2:37 AM on July 6, 2008


pedalpete, you need to re-read the crappy Guardian article I posted more closely. The World Bank report took weather impacts into account. Without being able to read the actual WB report, I can't say that they also took speculation into account, but it's hard to believe they didn't. They did address population, under the 'demand' concept.

Got corn stock?
posted by Kirth Gerson at 4:04 AM on July 6, 2008


I don't know about Asia, but a lot of maize, aka corn in North America, is grown in various parts of Africa for both home consumption and export -- so they would be affected by world markets.
posted by jb at 8:40 AM on July 6, 2008


Without being able to read the actual WB report, I can't say that they also took speculation into account,

If we're talking about the same thing, they did. It says: "It argues that production of biofuels has distorted food markets in three main ways....Third, it has sparked financial speculation in grains, driving prices up higher."
posted by salvia at 11:03 AM on July 6, 2008


Kirth Gerson,
That would be ADM.
posted by P.o.B. at 1:06 PM on July 6, 2008


Of course. One of our finest Free-Market citizens, earning their subsidies the old-fashioned way since 1898.
posted by Kirth Gerson at 1:54 PM on July 6, 2008


Popular Ethics - One thing I don't get about this whole issue is why developing countries aren't getting a huge boost out of this. Bob Geldof told me that the reason Africa remains impoverished is that Western agriculture subsides prevents rural farmers from getting a fair price for their produce. Shouldn't the recent price increase disproportionately help farmers?

Your first mistake is assuming that Geldoff knows what he's talking about. But you may have a point, yet who knows what the long term consequences would be. Given how much of the farming is subsidence would increased prices cause farmers in Africa to invest in farming methods and fertilizer? Is the capacity is there? Could it be developed? How long would this shift take and what are the intermediary costs in starvation, suffering, and reduced economic growth in Africa?

Thanks for the great background links on ethanol guys...
posted by stratastar at 7:44 AM on July 7, 2008


Well, increased food prices should help food producers in the developing world -- except that, of course, you need to remember that a great many people in the developing world are not food producers but wage labourers who have to buy their food at market rates. If they don't have the land and don't own the production, they suffer from price increases. Or even if they own the land and produce food, but have to market that food to a monopoly buyer (whether state-based or private), they may not see much of the increase in prices.

Increased prices might help investment in agriculture in Africa, but historically there has not been a lot of support from post-colonial governments in many African countries (Botswana being a notable exception) - the urban sectors tend to predominate, and agriculture has been taxed to support other industries (such as through monopoly state buying).

Also, a great deal of the improvement in agriculture in the first world has been through state-based investment - through education and research, and through the support of infrastructure which allows producers to get their products to markets (just think about how many agricultural colleges were founded in North America, etc in the last two centuries, what railroads and roads have meant for marketing produce). The question is: do African states have the both the political will, and the financial strength to make those kind of investments, especially considering the debt crises of the last two decades (and the loss of control over financial policy that this has sometimes entailed)?

And what will increased energy prices mean for non-oil producing nations? The last time oil prices spiked, many African countries were hit much harder than the developed world was - especially since their main exports didn't rise in price as much as oil.

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In terms of subsidies - Geldof actually does know what is talking about (or so at least scholars who study agriculture in the developing world tell me). But the problem there wasn't just holding food prices low (which is obviously good for all of the non-food producers in the developing world), but that by holding prices for food produced in the first world artificially low, the developing world lost any advantage it had (from lower labour costs) with competing in world export markets. Instead, their food is still the same price as that produced by the subsidzing countries, and a whole lot of their people are suffering because the price of all food is high.
posted by jb at 3:00 PM on July 7, 2008 [1 favorite]


(as far as I know, the food riots are urban -- the developing world is urbanising at an astonishing rate)
posted by jb at 3:01 PM on July 7, 2008


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