Biofuel demand to push up food prices

Posted: 6 July 2007

Author: John Vidal

Food prices will rise in the next 10 years as nearly twice as much sugar cane, maize and oilseed rape is grown to fuel cars, and people in rapidly developing countries adopt meat-based diets, says the UN in its annual assessment of farming trends.

The move to "agrofuels", which are expected to marginally lower climate change emissions and reduce US and European oil dependency, is being led by the US, Brazil, Europe and China. Last year more than a third of the total US maize crop went to ethanol for fuel, a 48 per cent increase on 2005. Brazil and China grew the crops on nearly 20m hectares (50m acres) of land. This area could double in 10 years, says the UN report on trends up to 2016.

But the switch to growing fuel crops will take land out of food production and increase the price of commodities such as sugar, maize and palm oils, says the report, which was jointly prepared by the World Food Organisation and the OECD.

While higher food prices are profitable for the mainly large-scale farmers who grow them, they threaten the economies of food-importing countries as well as the urban poor, says the report. The higher food prices will also mean extra costs for livestock farmers who must buy feed.

But the report does not consider the effect on food supplies of floods, droughts and other extreme weather linked to climate change. The price of wheat and some other food is edging record levels after devastating weather in Australia, the running down of grain reserves in the US and drought in Africa. Food price inflation stands at more than 6 per cent a year in some developing countries, says the report.

Continuing growth will increase the amount of meat reared. Nearly 30 per cent more beef, 50 per cent more pig meat and 25 per cent more poultry are expected to be consumed in developing countries by 2016, with 70 per cent more skimmed milk powder and sugar.

Social damage

Yesterday a report from 11 non-governmental groups said the rush to energy crops was encouraging intensive, industrial agriculture at the expense of sustainable food production. "The whole agrofuel process is going far too fast, pushed by corporations and governments before any controls are in place. Massive investment in infrastructure is already taking place that will set us on a path from which it will be difficult to escape," said Oscar Reyes of the Transnational Institute.

A parallel report by the Barcelona-based Grain said the agrofuel rush was causing more social damage than realised. "The Indian government is talking of planting 14m hectares of land with jatropha [a fast-growing tree]. The Inter-American Development Bank says that Brazil has 120m hectares that could be cultivated with agrofuel crops; an industry lobby is speaking of 379m hectares being available in 15 African countries. We are talking about expropriation on an unprecedented scale. It is likely to mean the privatisation of communal land, farmer evictions, rising food prices, competition for water resources, and the cutting down of forests and conservation areas," said Teresa Anderson, of Grain.

More than 100 groups want a moratorium on EU subsidies for agrofuels.

John Vidal is Environment Correspondent of The Guardian

This article is reproduced with permission from The Guardian of July 5, 2007. See www.guardian.co.uk Copyright Reserved.

Related Links:

Ethanol drives up world food prices

Bright future for biofuels, says report