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Food-for-fuel madness



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A picture worth a thousand words from IBD’s Michael Ramirez — whom TPPF had the pleasure of hosting at our 2008 Policy Orientation — on the food-for-fuel madness.

According to MSNBC, 2006 and 2007 saw sharp rises in agricultural commodity prices, and food prices went up at a compound annual rate of 4.7 percent for the 3 months ending February 2008. Could using our nation’s croplands to produce fuel stock for ethanol have something to do with this?

A report from CIBC last year noted that the U.S. was consuming 13.5 percent of its corn to produce a 1-percent reduction in gasoline consumption, and that converting the entire U.S. corn crop would only replace 9 percent of our gasoline.

And for the impact beyond our borders, we turn to the editors at the New York Times:

The world’s food situation is bleak, and shortsighted policies in the United States and other wealthy countries — which are diverting crops to environmentally dubious biofuels — bear much of the blame.

[T]he price of wheat is more than 80 percent higher than a year ago, and corn prices are up by a quarter. Global cereal stocks have fallen to their lowest level since 1982. . . . [T]he brunt is falling disproportionately on the poor.

[T]he most important reason for the price shock is the rich world’s subsidized appetite for biofuels. In the United States, 14 percent of the corn crop was used to produce ethanol in 2006 — a share expected to reach 30 percent by 2010. This is also cutting into production of staples like soybeans, as farmers take advantage of generous subsidies and switch crops to corn for fuel.

[T]he benefits of this strategy are dubious. A study by the Organization for Economic Cooperation and Development suggested that — absent new technologies — the United States, Canada and the European Union would require between 30 percent and 70 percent of their current crop area if they were to replace 10 percent of their transport fuel consumption with biofuels. And two recent studies suggested that a large-scale effort across the world to grow crops for biofuels would add carbon dioxide to the atmosphere rather than reduce it.

The human costs of this diversion of food into energy are all too evident.

 


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