August 30, 2007

I posted the other day about the rising price of tequila because of biofuels, and now a friend sends me two very interesting article detailing the multiple ways food prices will be increased by the turn to fuel alternatives (one concept being "food is, like, more important")

One article provides some good alarmist reporting and frightening information

The scale of the change is boggling. The Indian government says it wants to plant 35m acres (140,000 sq km) of biofuel crops, Brazil as much as 300m acres (1.2m sq km). Southern Africa is being touted as the future Middle East of biofuels, with as much as 1bn acres (4m sq km) of land ready to be converted to crops such as Jatropha curcas (physic nut), a tough shrub that can be grown on poor land. Indonesia has said it intends to overtake Malaysia and increase its palm oil production from 16m acres (64,000 sq km) now to 65m acres (260,000 sq km) in 2025.

While this may be marginally better for carbon emissions and energy security, it is proving horrendous for food prices and anyone who stands in the way of a rampant new industry. A year or two ago, almost all the land where maize is now being grown to make ethanol in the US was being farmed for human or animal food. And because America exports most of the world's maize, its price has doubled in 10 months, and wheat has risen about 50%....

A "perfect storm" of ecological and social factors appears to be gathering force, threatening vast numbers of people with food shortages and price rises. Even as the world's big farmers are pulling out of producing food for people and animals, the global population is rising by 87 million people a year; developing countries such as China and India are switching to meat-based diets that need more land; and climate change is starting to hit food producers hard. Recent reports in the journals Science and Nature suggest that one-third of ocean fisheries are in collapse, two-thirds will be in collapse by 2025, and all major ocean fisheries may be virtually gone by 2048. "Global grain supplies will drop to their lowest levels on record this year. Outside of wartime, they have not been this low in a century, perhaps longer," says the US Department of Agriculture....

In seven of the past eight years the world has actually grown less grain than it consumed, says Brown. World stocks of grain - that is, the food held in reserve for times of emergency - are now sufficient for just over 50 days. According to experts, we are in "the post- food-surplus era".



The other debunks the idea and concludes that Americans won't really notice an increase. But, oh yeah, the hardest hit will be those in poorer countries like Mexico.

A Bigger Impact for Some Consumers

With agriculture being asked to supply an increasing share of U.S. fuel, it follows that food prices will trend upward. For most Americans, though, the higher prices caused by ethanol will hardly be noticeable. However, low-income U.S. consumers spend a much greater proportion of their income on food than high-income consumers do. Their large share combined with less flexibility to adjust expenditures in other budget areas means that any increase in food prices will cause hardship.

Low-income consumers in other countries will be hurt even more by more expensive food. For example, the average Mexican consumer spends 12 percent of his or her food budget (about 3 percent of disposable income) directly on corn products, primarily tortillas. This means that any increase in the price of corn will affect the standard of living of many in Mexico.


Perhaps we should find a true alternative? And while we are at it, stop paving the world's most productive soil for strip malls and subdivisions AND for fuel.



Geez, hasn't anybody read The Road? Don't you know what is going to happen....




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