Food = Fuel = Starvation
The New York Times published a fairly stinging attack on the use of food for fuel. They point out that the biofuel craze is partly responsible for soaring food prices. The sharp price increase for food has in turn has led to sharp declines in the amount of food aid the US has purchased this year. Since the US is by far and away the largest food donor in the world, this is a huge problem for the starving in the world's poorest places.
Soaring food prices, driven in part by demand for ethanol made from corn, have helped slash the amount of food aid the government buys to its lowest level in a decade, possibly resulting in more hungry people around the world this year.
The United States, the world’s dominant donor, has purchased less than half the amount of food aid this year that it did in 2000, according to new data from the Department of Agriculture.
“The people who are starving and have to rely on food aid, they will suffer,” Jean Ziegler, who reports to the United Nations on hunger and food issues, said in an interview this week.
Corn prices have fallen in recent months, but are still far higher than they were a year ago. Demand for ethanol has also indirectly driven the rising price of soybeans, as land that had been planted with soybeans shifted to corn. And wheat prices have skyrocketed, in large part because drought hurt production in Australia, a major producer, economists say.
The higher food prices have not only reduced the amount of American food aid for the hungry, but are also making it harder for the poorest people to buy food for themselves, economists and advocates for the hungry say.
“We fear the steady rise of food prices will hit those on the front lines of hunger the hardest,” said Josette Sheeran, executive director of the United Nations World Food Program. The United States is the biggest contributor to the agency.
She warned that food aid spending would have to rise just to keep feeding the same number of people. But the appropriations bill for the coming year now moving through Congress does not promise any significant increases in the food aid budget.
The impact of rising food prices on food aid is part of a broader debate about the long-term impact on the world’s poorest people of using food crops to make ethanol and other biofuels, a strategy that rich countries like the United States hope will eventually reduce dependence on Middle Eastern oil.
Regular readers know that I have been pointing out this inevitable result for quite some time. But it is even more complicated than just this aspect. So much food is being diverted to fuel production that ethanol prices are collapsing.
NEVADA, Iowa, Sept. 24 — The ethanol boom of recent years — which spurred a frenzy of distillery construction, record corn prices, rising food prices and hopes of a new future for rural America — may be fading.
Only last year, farmers here spoke of a biofuel gold rush, and they rejoiced as prices for ethanol and the corn used to produce it set records.
But companies and farm cooperatives have built so many distilleries so quickly that the ethanol market is suddenly plagued by a glut, in part because the means to distribute it have not kept pace. The average national ethanol price on the spot market has plunged 30 percent since May, with the decline escalating sharply in the last few weeks.
“The end of the ethanol boom is possibly in sight and may already be here,” said Neil E. Harl, an economics professor emeritus at Iowa State University who lectures on ethanol and is a consultant for producers. “This is a dangerous time for people who are making investments.”
While generous government support is expected to keep the output of ethanol fuel growing, the poorly planned overexpansion of the industry raises questions about its ability to fulfill the hopes of President Bush and other policy makers to serve as a serious antidote to the nation’s heavy reliance on foreign oil.
It is NOT just happening in the US:
The ethanol producers are going bankrupt. Higher corn prices (because the whole grain complex is going up) and lower ethanol prices are killing the ethanol manufacturers that depend on corn. The lower ethanol prices helped the economy because the gasoline prices stayed depressed because of a glut of ethanol all around of us.
As ethanol producers go belly up, the supply reduces, three things will happen. First, the ethanol price will go up. So will gasoline price compared to crude oil. Lastly, Sugar 11 (the international sugar) will also jump as worldwide ethanol prices go up.
And yet Al Gore and his sycophants yowl for more "renewable energy." Too bad the lives of the people who starve to death as a result of the diversion of food for fuel aren't renewable.
Energy, Environment, World news | Gaius Monday, 1 October , 2007
By Mwalimu Daudi, Monday, 1 October , 2007 @ 4:26 pm
How long do you suppose it will be before the MSM decides it is Bush’s fault?
I can just hear it now: Bush is in the pockets of Big Corn.
By terrence, Monday, 1 October , 2007 @ 6:32 pm
This is just another example of GWB’s ugly racism - it is poor, PEOPLE of COLOR, who are starving to death because of this predictable food disaster. Bush is paying a HUGE subsidy to the US corn growers; he has done nothing to stop this disaster; he has single-handedly brought about the death of millions of innocent PEOPLE of COLOR. Oh the horror; the shame. /sarcasm off
By feeblemind, Wednesday, 3 October , 2007 @ 4:53 pm
Some feebleminded random thoughts: 1)The jury is still out as to whether ethanol production has peaked. The article describes the ethanol glut as being too much too soon. Those kind of problems can be worked out. 2)As for plants going belly up, it is a possibility. But if they do, someone might come along and buy the plant for 10 cents on the dollar and open it right back up with much smaller fixed expenses. 3)In my area, there are more plants coming on line than there is corn to supply them. 4) Corn delivered to ethanol plants does not disappear down a black hole. One thing that everyone seems to be overlooking is that there is a tremendous tonnage of grain byproducts that come out of ethanol plants. Perhaps a third of the corn that goes in comes out as feed byproducts. It pretty much has to be fed to cattle. If cattle are eating distiller’s grain then they are eating less raw corn. 5) Repubs and dems both have their fingerprints all over ethanol, so it will be difficult for either side to use rising food prices as a campaign issue.