Higher Food Prices-Biofuels: A Bad Mix

An important editorial in this weekend's Toronto Star. It doesn't condemn biofuels (Canada is now a player with a 5% mandated mix of ethanol and gasoline), but clearly shows the impact on the world's poor.

From:  http://www.thestar.com/opinion/editorials/article/978826--soaring-food-prices-the-world-s-poor-grow-hungrier

Soaring food prices: The world’s poor grow hungrier

April 24, 2011

More than 935 million people around the world don’t have enough to eat — and the number grows every day. The World Bank says food prices have soared 36 per cent over the past year. The United Nations Food and Agricultural Organization reports that its index of world food prices is the highest since it began keeping records 21 years ago. The world’s poor are hungry, and quickly growing hungrier.
Some of the consequences are clear. Unrest in some of the countries of the “Arab Awakening,” notably Egypt, has been fuelled by quickly rising food prices. There have been food riots in Bangladesh where nutritious palm oil — a major ingredient for biofuel — is harder to find. The UN is alarmed about the 50 per cent shortfall in funding for Afghanistan’s food operations, saying seven million Afghans will go hungry this year.
Ironically, the crisis is being made worse by the otherwise laudable rush into biofuels. In a particularly cruel example of the law of unintended consequences, the diversion of such crops as corn, cassava, canola and sugar to make ethanol is sending their prices through the roof. “Global maize prices rose about 73 per cent in the six months after June 2010,” reports the World Bank’s Agriculture and Rural Development Team.
Forty per cent of the U.S. corn crop now goes into ethanol. (The figure is much lower in Canada: the federal government has deemed our fuels should be made up of 5 per cent ethanol.) China imports almost all of Thailand’s cassava root crop — a staple food in much of Africa — and turns it into fuel.
Using food to make fuel is a positive step as the world attempts to wean itself off oil. But when it begins to impact the food chain it becomes worrisome. “Supply of food must match world needs,” says Olivier De Schutter, the UN’s special rapporteur on the right to food. He recommends that rich countries develop strategies to support ecological agriculture in less developed states.
This is not a new problem. In 2008, when food prices spiked even higher, leaders of the G20 countries pledged $22 billion over three years to help poor countries increase food production. Predictably, when the crisis eased they lost their focus. The World Bank fund set up to administer this money has received only $400 million so far.
Developed countries need to heed the experts who warn that targets for biofuel must now be balanced against demand for basic foodstuffs. And the G20, Canada among them, should pony up the money they promised three years ago. With the world’s population predicted to top 9 billion by 2050, money spent now to ensure food security down the road will be an excellent investment.