Food requirements likely to trump energy demands

In three decades, US taxpayers have paid out $20 billion in subsidies for ethanol products, which allowed the oil substitute gain a small part of the fuel market — while using nearly 40% of American maize — grown on 72.7m US acres.

Not surprisingly, President Barack Obama is under pressure from all sides (including the UN Food and Agriculture Organisation) to end ethanol subsidies and mandates.

Such a move would transform world agriculture.

But with maize yields at a 17-year low, anything can happen.

This year’s exceptional circumstances may be a precursor for decades of sudden changes in direction in world agriculture. And everything points to diversion of land use and grains back to food from energy production.

Supposedly “greener” and a reducer of global warming, in the US, an acre of maize can fuel about seven family cars for a week, instead of feeding a family for a year.

The writing could also be on the wall for the EU’s inflexible biofuel mandate, which results in 65% of EU-grown vegetable oils being converted into biodiesel.

Critics say EU biofuel does not reduce carbon dioxide emissions — and drought-stricken US crops and record-high grain prices could be the last straw for this industry.

Heated debate is expected when the European Commission shortly proposes measures to ensure EU biofuels do not clash with food production or the environment.

Other countries like Canada, and Indonesia which suddenly diverted grain and oilseed crops to fuel uses might also have to reconsider.

Minds will be changed as world populations grow about 1% per year for the next 33 years.

This includes a quadrupling of the number of people — and their pet cats and dogs — who will be able to afford to eat high-quality diets.

The power of seven billion affluent consumers, compared to 1.5 billion today, is likely to put food ahead of biofuels — or to demand that renewable fuels come only from non-food origins such as wastes and discarded biomass, while farmers get down to the business of feeding eight to nine billion without ploughing up wildlife refuges.

Meat consumption is expected to rise about 40%. Milk for each Chinese school child, and ice cream throughout the developing countries as they get electricity, are the predicted market trends.