A blog I wrote during February 2007 about the effects of ethanol mentioned the impact on food with emphasis on Mexico. It read, in part:
“Excitement over ethanol, a renewable fuel made with corn, has reached such a high level that there has been a virtual rush on corn. The effects have been devastating, especially in Mexico with a society, culture, and way of life dominated by the tortilla. Tortillas make up 40 percent of the diet for poor Mexicans, and with corn prices quadrupling in Mexico since last summer, Mexico is suffering through its worst tortilla crisis.
Exorbitant tortilla costs created by the buzz about ethanol have left few alternatives in Mexico. Mexicans who can afford food are bypassing tortillas for options that are less healthy, so they are gaining weight. The poor are eating less, eating less healthy, or going hungry.
There are many concerns about ethanol, its effect on world hunger being the latest. Ethanol has been known to wreak havoc on small engines, and now it is likely to wreak havoc on the food supply.”
Surely there were some who read that column and dismissed the conclusion. I doubt that’s the case today.
This is no longer a Mexican tortilla problem. Food supply epidemics have reached global proportions. The latest Agricultural Outlook from the Organization for Economic Cooperation and Development (OECD) and the United Nations Food and Agriculture Organization, unveiled in late May in Paris has the grim details about escalating prices:
“Using data for February 2008 compared to February 2007, milk product prices have generally risen sharply, as shown by those for butter with price increases of 50% in Poland, 40% in France, 36% in Spain, 32% in the Czech Republic, about 36% in Jordan and some 12% in Malaysia. Egg prices have also risen sharply, by 34% in the US, 30% in the UK and the Czech Republic and 10% in Spain. Vegetable oil prices rose 18% in India and 47% in Botswana in the past year. Meat prices rose sharply in some countries such as China, where the increase was 45%.”
Sixteen months ago I pointed the finger at ethanol. Recently in Paris, world food experts did the same. OECD agriculture official Loek Boonekamp, according to the Washington Post, says about 33 percent of the projected increase in food prices over the next 10 years can be attributed to biofuels. Boonekamp also called the benefits of converting food into fuel, “probably smaller than commonly expected."
An OECD press release says growing demand for biofuels is leading to higher food prices, reporting “
World fuel ethanol production tripled between 2000 and 2007 and is expected to double again between now and 2017 to reach 127 billion liters a year. Biodiesel production is seen to expand from 11 billion liters a year in 2007 to around 24 billion liters by 2017. The growth in biofuel production adds to demand for grains, oilseeds and sugar, so contributing to higher crop prices.”
The prognosis for the future of food prices from the OECD is bleak:
“Commodity prices will average substantially above the levels that prevailed in the past 10 years. When the average for 2008 to 2017 is compared with that over 1998 to 2007, beef and pork prices may be some 20% higher; raw and white sugar around 30%; wheat, maize and skim milk powder 40 to 60%; butter and oilseeds more than 60% and vegetable oils over 80%.
The poor, and in particular the urban poor in net food importing developing countries, will suffer more. In many low-income countries, food expenditures average over 50% of income and the higher prices will push more people into undernourishment.”
The report predicts more violent outbreaks and riots over food shortages that have already been reported in some countries.
The OECD recommends further review of existing biofuel policies. The suggestion comes as some members of Congress are requesting a relaxation of a requirement that 9 billion gallons of renewable fuels be produced in 2009, up from 6.5 billion last year. How widespread does the world’s food crisis have to get before we put the brakes on converting our food supply into fuel?
