Growing Use of Biofuels Stresses Global Food Markets
The idea of turning farms into fuel plants seemed, for a time, like one of the answers to high global oil prices and supply worries. That strategy reached a zenith last year when Congress mandated a five-fold increase in the use of biofuels.
But now a backlash is building against policies in America and Europe to promote ethanol and similar fuels, with political leaders in poor countries contending that they are driving up food prices and starving poor people. Biofuels are fast becoming a new flash point in global diplomacy, forcing Western politicians to reconsider their policies, even as they argue that biofuels are only one factor helping to drive up food prices.
The higher prices are sparking riots, political instability and growing worries about feeding the poorest people. Food riots contributed to the dismissal of Haiti’s prime minister last week, and many other countries are nervously trying to calm anxious consumers.
At a weekend conference in Washington, the world’s economic ministers called for urgent action to deal with the price spikes, and several of them demanded a reconsideration of biofuel policies adopted recently in the West.
Many experts in food policy consider government mandates for biofuels to be ill-advised, agreeing that the diversion of crops into fuel production has contributed to higher prices. But other factors have played big roles, including droughts that have limited output for some crops and rapid global economic growth that has sparked higher food demand.
That growth, much faster over the last four years than the historical norm, is lifting millions of people out of destitution and giving them the means to eat better diets. But farmers are having trouble keeping up with the surge in demand.
Work by the International Food Policy Research Institute, in Washington, suggests that biofuel production accounts for a quarter to a third of the recent increase in global commodity prices. The Food and Agriculture Organization of the United Nations predicted late last year that biofuel production, assuming current mandates continue, would increase food costs by 10 to 15 percent.
Ethanol supporters agree that biofuels have been a factor in food price increases, but they maintain that it is relatively small and that energy costs and soaring demand for meat in developing countries have had a bigger impact.