Today in Biofuels Opinion: New York Times editorial calls for end to ethanol subsidies; US News says government panic fueling food shortages

April 10, 2008

The New York Times writes in an editorial that “Rising food prices provide an urgent argument to nix ethanolâ€™s supports,” noting that the IMF estimates that corn ethanol production is responsible for half the global corn demand increase in the past three years….”At best, corn ethanol delivers only a small reduction in greenhouse gases compared with gasoline. And it could make things far worse if it leads to more farming in forests and grasslands.”

US News and World Report notes that panic among national leaders is scuttling trade that holds down food prices, “Since early 2007, when food prices began marching noticeably upward, there have been violent riots in more than a dozen countries, growing malaise in developed areas, including the United States, and a fluid debate about the origins of the spike…Since the first of the year, additional jumps in food prices have bred not only uneasiness and widespread fear but also, in recent weeks, extreme responses. Countries in Asia and South America are clamping down on exports or banning them, often at the behest of panic-stricken leaders worried about inflation….In a sense, the unfolding scene is a sort of “prisoner’s dilemma” known in game theory: Individuals (and individual countries) are moving to protect their own interestsâ€””defecting” rather than cooperatingâ€”as supplies become more precious….The effect, some analysts say, has been to drive the market cost of foodâ€”rice and wheat, in particularâ€”even higher and to further destabilize countries at risk of violence and hunger. …Rice, which is the staple food for roughly half of the world’s population, or more than 3 billion people, has been particularly affected. China, Vietnam, and Egypt have imposed limits on the amount of rice they will export. India, at the end of March, banned “non-basmati” rice shipments outright and has continued to ratchet up the minimum price of basmati exports, which are known for their higher quality. Thailand, the world’s largest rice exporter, is reportedly flirting with the idea of doing the same, even as its farmers toil to plant a third crop of rice this year, one more than usual.”

The Chief Innovation Officer of Dupont, Thomas Connelley, interviewed in The Hindu, said “We recognised that the future of bio-based space will be constrained by the limitation of carbon from food crops. We began to work with the U.S. Department of Energy in a project in 2003 to use other parts of the plant. So instead of using the grains we are looking at cellulose based sources of carbon to produce energy. We have had a running start because long before the world realised the fuel versus food debate, we knew we had to get there. Back in 2003 nobody was talking about this. In 2008 it is a big prominent question. We thought we had a decade to get there….I think it is because of the global emphasis on climate change, run up in the prices of petroleum. All these are pushing us to non-food crop sources of carbon material for the production of fuel. I should say we anticipated the direction but not the speed at which we would reach there.”

AFP reports on a letter from UK Prime Minister Gordon Brown to Japanese prime minister Yasuo Fukuda: “There is growing consensus that we need urgently to examine the impact on food prices of different kinds and production methods of biofuels, and ensure that their use is responsible and sustainable. Rising food prices threaten to roll back progress we have made in recent years on development. For the first time in decades, the number of people facing hunger is growing. Food prices have risen sharply leading to food riots in several countries. Increased wealth and growing populations in developing countries contribute to steadily increasing global demand for grains, for food and animal feed, aggravated by rapidly increasing biofuel production.” Brown called for a “a WTO trade deal that provides greater poor country access to developed country markets.”