Biofuel does impact on food prices after all
The bank’s assessment, published recently by the Guardian, is based on the most detailed analysis of the crisis so far. The study has been carried out by a world-respected economist and contradicts US government claims that plant-derived fuels contribute less than 3% to food-price rises.
It also challenges the view of NTR, the Irish company committed to renewable fuels as a major part of its future growth strategy.
NTR is the second largest biofuel player in the US market and has big plans to expand further in that rapidly expanding market where the Bush administration is championing this extensive renewable fuel initiative, as a counter measure to dwindling oil supplies.
The rush for renewable energy has encouraged governments to look for rapid results as the twin issues of falling oil supplies and the need to cut carbon emissions are being addressed.
It is becoming clear however that the search for renewable fuels is not as simple as first presented.
It is worth remembering that when sugar beet growers were chasing Greencore, the owners of the Irish Sugar company to start biofuel production at the Mallow sugar plant the idea was rejected as unprofitable.
Except in Brazil where fuel is made from sugar cane, it is hard to produce ethanol profitably without some form of government subvention.
If this report stands up then it raises the debate about how we can look to create renewable energy, a good thing and how we look after the marginalised .
While there is a lack of hard evidence about the impact of the renewable fuels initiative on the cost of food the reality is that 100 million people have been edged closer to starvation than was the case 12 months ago.
That is not a pleasant thought given that half the world’s population is just subsisting from day to day.
Where we go from here remains to be seen. According to the Guardian, senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George W Bush.
That is because it would put the World Bank in a political hot-spot with the White House, and in situations like this vested interests tend to be protected irrespective of the impact on those with no voice.
This report comes at a critical point in the world’s negotiations on biofuels policy. Leaders of the G8 have initiated moves to help tackle the food crisis while at the same time trying to tiptoe around this very controversial view that biofuels will come at a high price for the world’s starving.
The drivers of this policy such as the US face intense lobbying from campaigners who want a moratorium on plant-derived fuels.
At this point is appears political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises, according to Robert Bailey, policy adviser at Oxfam.
Commenting on the findings he said it was “imperative that we have the full picture. While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat”.
It would be wrong to point all the finger of blame on the biofuel sector for the soaring cost of food prices.
Other factors have been at play including droughts rising demand and a shift in the balance between the amount of food produced and international demand.
This debate is only warming up and it will be interesting to see how NTR positions itself. In the interest of balance it would be interesting to hear from the group given it rejects the view that biofuel production is responsible for most of the recent rise in food prices.
