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Published on Saturday, January 26, 2008 by Inter Press Service

Biofuels a Lose-Lose Strategy, Critics Say

by Stephen Leahy

BROOKLIN - U.S. biofuels production is driving up food prices around the world, giving billions of poor people a very good reason to hate U.S. policy, say environmentalists.

"The U.S. has led the fight to stem global hunger, now we are creating hunger," said Lester Brown, president of the Earth Policy Institute, an environmental think tank in Washington.

The booming U.S. ethanol industry is diverting enormous amounts food into fuel: 81 million tonnes of grain in 2007 and 114 million tonnes this year, equaling 28 percent of the entire U.S. grain harvest, Brown told IPS.

Previous eras of high grain prices were mainly the result of bad weather, but these price hikes are the result of government policy, he said.

"Grain prices are at record or near-record highs and they will go higher," he said. "We might be the first society in history to use public tax dollars to drive up its own food prices."

U.S. government subsidies for ethanol and biodiesel will be 13 billion dollars this year and will approach 100 billion dollars for the 2006-2012 period, according to a report released last October by the International Institute for Sustainable Development's Global Subsidies Initiative based in Geneva, Switzerland.

These subsidies translate into roughly 1.40 dollars to 1.70 dollars per gallon of gasoline equivalent and 2.00 dollars to 2.35 dollars per gallon of diesel equivalent. And the way current legislation is written, U.S. taxpayers will continue to subsidise every gallon of biofuel for decades to come, the report found.

On Dec. 19, President George W. Bush signed into law the Energy Independence and Security Act 2007, which mandates the use of 36 billion gallons of agrofuels per year by 2022 -- a five-fold increase over present levels.

"We pay billions to support the ethanol industry and then we pay again at the supermarket for higher-priced foods," said Brown.

This lose-lose biofuel strategy doesn't even offer any genuine environmental benefits, he added, since growing corn and making ethanol uses lots of fuel, fertiliser, pesticides and water, and degrades the soil.

Turning food into biofuel pits the car owners of the world against the two billion poor who struggle to get enough to eat, he said. The results of this unequal competition will be even worse than a 2007 University of Minnesota study that reported the 850 million people currently suffering from hunger and malnutrition will rise to at least 1.2 billion by 2025 because of competition for land and water from biofuels.

As wheat, corn, and soybean prices climb, prices of the food products made directly from these commodities such as bread, pasta and tortillas, and those made indirectly, such as pork, poultry, beef, milk, and eggs, are everywhere on the rise. In Mexico, corn meal prices are up 60 percent. In Pakistan, flour prices have doubled. China is facing rampant food price inflation.

Social unrest over food prices has already started, creating instability in weaker countries, and it will only get worse, Brown predicted.

"Agrofuels (biofuels) are driving us up an inflationary food price spiral," agreed Eric Holt-Gimenez of the Institute for Food and Development Policy/Food First, an NGO in Oakland, California.

High oil prices are pushing up the price of ethanol so farmers and agribusiness scramble to plant more and more land to grow crops for fuel. And with less land for food crops, food prices will continue to rise, so that some will switch from ethanol to food. That will ratchet up the price of ethanol and prices will spiral ever upwards, Holt-Gimenez told IPS.

"Food retailers, grain companies, seed and fertiliser corporations, and the oil industry will be laughing all the way to the bank," he said.

A coalition of U.S organisations have called for an immediate moratorium on U.S. incentives for agrofuels, U.S. agro-energy monocultures and global trade in agrofuels. The U.S. is still the world's biggest grain exporter, but could not grow enough corn to produce 36 billion gallons of ethanol, so a significant portion will have to be imported, likely from Southeast Asia and Latin America, Holt-Gimenez said.

The rush to supply agrofuels to Europe and elsewhere is pushing people off their land in the global south. In Southeast Asia, poor people can't even find palm oil to cook with because it is being turned into biodiesel for northern countries, he said.

Many environmental groups in the North initially supported biofuels as a way to help small farmers in the South and reduce greenhouse gas emissions, but failed to see what might happen when large corporate and financial interests became involved. "Now biofuels are completely transforming the world's food and fuel system and it has become a major issue in many countries," he said.

In the past year, numerous scientific, economic and social studies have offered evidence that biofuels are a huge mistake. Even the future second-generation cellulosic biofuel will compete with food by using land, water and reducing soil fertility. While Europe had re- examined its commitment to biofuels, on Jan. 23 it affirmed its target that 10 percent of all fuels for transport be biofuels by 2020.

"There is tremendous corporate power behind the agrofuel industry," Holt-Gimenez concluded.

Lester Brown, an agricultural economist for many years, says it's too late for debate. An immediate halt on all ethanol plants under construction is needed, otherwise social and economic turmoil lie ahead.

"Biofuels will be seen as one of the great tragedies in history," Brown said.

© 2008 Inter Press Service

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