Food vs fuel

Published: Monday 30 June 2008

Food vs fuel

The final press conference of the meet was postponed by an hour and a half because there were disagreements on the final document to be read by DG Diouf. According to fao sources, the dispute was to do with biofuels and the liberalization of agricultural trade. The delay did not come as a surprise; an undercurrent of dispute, stemming from differing concerns, was there all through the conference. The rich nations of the North brought their own agenda to the meet, which was to defend their right to alternative fuel and therefore their interests in biofuel. The South was more concerned about feeding its hungry and protecting the interests of its farmers, which would happen when agricultural trade became fair.

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Director-General of FAO
"Nobody understands how 100 million tonnes of cereals got diverted from human consumption, mostly to satisfy a thirst for fuel for vehicles"  
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President of the Federative
Republic of Brazil
"It is frightening to see attempts to draw a causeand-effect relationship between biofuels and the rise in food prices"  
Biofuel thus had to become a sticky issue at the conference. The president of the Arab Republic of Egypt, Mohammed Hosni Mubarak, called for international guidelines for utilization of biofuel as an alternative source of energy. "In some cases biofuel production is in competition with food supply," Japanese Prime Minister Yasuo Fukuda told the gathering. "We need to ensure that biofuel production is sustainable."

Studies by international organizations, including the imf, indicate that the increased demand for biofuel is contributing between 15 per cent and 30 per cent of the food price rise. Ed Schafer, the us secretary for agriculture, contested that biofuel was responsible for only 2-3 per cent of the predicted 43 per cent rise in food prices in 2008. Pawar cited fao data, which stated that high commodity prices were not triggered in emerging economies. Instead, maize and rapeseed being diverted for feed stock and production of ethanol and bio-diesel, along with the rising agricultural input costs due to high fuel prices, had the greatest impact on rising globalfood prices.

Brazilian president Lula's was the only discordant voice among leaders of the South as he had to protect the interests of sugarcane farmers of his country, who had found a lucrative market in ethanol. He countered the criticism by emphasizing that the ethanol produced from sugarcane in his country was clean and had been in use for long. "It is frightening to see attempts to draw a cause-and-effect relationship between biofuels and the rise in food prices," he said.

Schafer too sought a clean chit by insisting that the corn-based ethanol was not driving up food prices. "The ethanol-based fuel policy of the us is the right policy in the right direction," he said. The question is, right for whom.

The American biofuel policy had diverted use of land from growing corn for food to growing corn for fuel. The Brazilian president criticized the us approach, saying corn-based ethanol was less efficient than the fuel produced with sugarcane and can only compete with it when "shored up with subsidies and shielded behind tariffs".

The us has been heavily subsidizing production of corn-based ethanol. According to the World Bank, the country has set a target of 28.4 billion litres of biofuel for transportation by 2012. Last year, the eu endorsed a bioenergy plan to supply 10 per cent of the fuel for road transportation by 2020.

According to fao, biofuel accounted for one-third of maize production in the us in 2007. Maize prices peaked to a 10-year high in February 2007 despite record production growth in 2006-07. The June 2008 fao report suggests that total utilization of grains for ethanol production in 2007-08 is estimated at 98 million tonnes, up 40 per cent from the previous year.

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"That absurd first world consumes three quarters of the energy produced in the world"  
The conference, till the very end, did not address the challenge to world food availability from biofuels as its title said it would. It failed to come with international guidelines for biofuel policy. All that the declaration said was that an "in-depth study was necessary to ensure that production and use of biofuel was sustainable...and maintained global food security." No tough stand was taken on grain being converted into fuel despite the un Right to Food rapporteur, Jean Ziegler, stating that "biofuel was a crime against humanity".

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