Washington Post - World food prices have surged above the food crisis levels of 2008. Millions more people will be malnourished, and hundreds of millions who are already hungry will eat less or give up other necessities. Food riots have started again.
Nearly all assessments of the 2008 food crisis assigned biofuels a meaningful role, but much of academia and the media ultimately agreed that the scale of the crisis resulted from a "perfect storm" of causes. Yet this "perfect storm" has re-formed not three years later. We should recognize the ways in which biofuels are driving it.
Demand for biofuels is almost doubling the challenge of producing more food. Since 2004, for every additional ton of grain needed to feed a growing world population, rising government requirements for ethanol from grain have demanded a matching ton. Brazil's reliance on sugar ethanol and Europe's on biodiesel have comparably increased growth rates in the demand for sugar and driven up demand for vegetable oil.
Agricultural production is keeping up in general with the growing demand for food - but it keeps up with the added demand for biofuels only if growing weather is good. A good growing year in 2008 helped end that year's crisis, but average-to-poor weather since then has stressed inventories and confidence. Higher fuel costs for farmers and a weaker dollar contribute to higher prices, but prices soar only when large consumers, fearing that production will continue to fall short, bid up prices to secure their supplies.
Much of today's discussion focuses only on the challenge of meeting rising food demand because of factors such as rising meat consumption in China and long-term underinvestment in agricultural research. Droughts in Russia and floods in Australia over the past year may be early harbingers of climate change. But if it is hard to meet rising food demands, it must be harder to meet demands for both food and biofuels.
So why has attention shifted away from biofuels? The answer probably lies in the confusing explanations of 2008, when the problem and its "cause" were defined in different ways.
...The good news is that relief is possible. The same economic studies imply that food prices should come down if we can just limit biofuel growth. Corn ethanol is nearing Congress's requirement for 15 billion gallons a year, and lawmakers need to hold it there. Similarly, Europe must rethink its mandates. For "advanced biofuels" required by Congress, the Obama administration needs to focus on fuel sources that do not compete with food, such as garbage and crop residues, and not grasses grown on good cropland. Otherwise, the sequel to the food crisis is likely to turn into a series.
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