Food vs fuel
This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Food_vs_fuel".

Food vs fuel is the dilemma regarding the risk of diverting farmland or crops for biofuels production in detriment of the food supply on a global scale. Biofuel production has increased in recent years. Some commodities like maize, sugar cane or vegetable oil can be used either as food or to make biofuels. For example, since 2006, land that was also formerly used to grow other crops in the United States is now used to grow maize for biofuels, and a larger share of maize is destined to ethanol production, reaching 25% in 2007.^[1] With global demand for biofuels on the increase due to the oil price increases taking place since 2003, there is also fear of the potential destruction of natural habitats by being converted into farmland.^[2] Environmental groups have raised concerns about this trade-off for several years,^[3][4][5][6] but now the debate reached a global scale due to the 2007–2008 world food price crisis. Others consider biofuels a way to fight world hunger, which is caused by poverty and inequity, not by an absolute shortage of food.^[7][8] Brazil, the world's second largest producer of ethanol after the U.S., is considered to have the world's first sustainable biofuels economy^[9][10] and its government claims Brazil's sugar cane based ethanol industry has not contributed to the 2008 food crises.^[11]

The "food vs. fuel" or "food or fuel" debate

This topic is internationally controversial, with good-and-valid arguments on all sides of this ongoing debate. There is disagreement about how significant this is, what is causing it, what the impact is, and what can or should be done about it.^[12][13][14]

Food price inflation

From 1974 to 2005 real food prices (adjusted for inflation) dropped by 75% (1/4th the price). With this history, recent rapid food price increases are extraordinary. ^[15] It has been said about the world food crisis that, "This is the world's big story." ^[16]

Corn is used to make ethanol and prices went up by a factor of 3 in less than 3 years (measured in US dollars). ^[17] Reports in 2007 linked stories as diverse as food riots in Mexico due to rising prices of corn for tortillas,^[18] and reduced profits at Heineken the large international brewer, to the increasing use of corn (maize) grown in the US Midwest for ethanol production. (In the case of beer, the barley area was cut in order to increase corn production. Barley is not currently used to produce ethanol.)^[19] Wheat is up by almost a factor of 3 in 3 years,^[20] while soybeans are up by a factor of 2 in 2 years (both measured in US dollars). ^{[21] [22]}

As corn is commonly used as feed for livestock, higher corn prices lead to higher prices in Animal source foods. Vegetable oil is used to make biodiesel and has about doubled in price in the last couple years. The price is roughly tracking crude oil prices. ^{[23] [24][25]} The 2007–2008 world food price crisis is blamed partly on the increased demand for biofuels.^[26]

Rice prices have gone up by a factor of 3 even though rice is not directly used in biofuels. ^[27]

Proposed causes

Factors other than food or fuel

That food prices went up at the same time fuel prices went up is not surprising and should not be entirely blamed on biofuels. Energy costs are a significant cost for fertilizer, farming, and food distribution. Also, China and other countries have had significant increases in their imports as their economies have grown. ^[28] Sugar is one of the main feedstocks for ethanol and prices are down from 2 years ago. ^{[29] [30]} Part of the food price increase for international food commodities measured in US dollars is due to the dollar being devalued. ^[31] Protectionism is also an important contributor to price increases. ^[32] 36% of world grain goes as fodder to feed animals, rather than people.^[33]

Over long time periods population growth and climate change could cause food prices to go up. However, these factors have been around for many years and food prices have jumped up in the last 3 years, so their contribution to the current problem is minimal.

Governments distorting food and fuel markets

France, Germany, The United Kingdom and The United States governments have supported biofuels with tax breaks, mandated use, and subsidies. These policies have the unintended consequence of diverting resources from food production and leading to surging food prices and the potential destruction of natural habitats.^[2][15] Current government policies cause distortions of supply and demand. Without government involvement the move to biofuels would not be so drastic and food prices would not have gone up so much.

Fuel for agricultural use often does not have fuel taxes (farmers get duty-free petrol or diesel fuel). Biofuels may have subsidies ^[34] and low/no retail fuel taxes. ^[35] Biofuels compete with retail gasoline and diesel prices which have substantial taxes included. The net result is that it is possible for a farmer to use more than a gallon of fuel to make a gallon of biofuel and still make a profit. Some argue that this is a bad distortion of the market. There have been thousands of scholarly papers analyzing how much energy goes into making ethanol from corn and how that compares to the energy in the ethanol. ^[36] Government distortions can make things happen that would not make sense in a free market.

Oil price increases

Oil price increases since 2003 have resulted in increased demand for biofuels. Transforming vegetable oil into biodiesel is not very hard or costly so there is a profitable arbitrage situation if vegetable oil is much cheaper than diesel. Diesel is also made from crude oil, so vegetable oil prices are partially linked to crude oil prices. Farmers can switch to growing vegetable oil crops if those are more profitable than food crops. So all food prices are linked to vegetable oil prices, and in turn to crude oil prices.

Demand for oil is outstripping the supply of oil and oil depletion is expected to cause crude oil prices to go up over the next 50 years. Record oil prices are inflating food prices worldwide, including those crops that have no relation to biofuels, such as rice and fish.^[37]

In Germany and Canada it is now much cheaper to heat a house by burning grain than by using fuel derived from crude oil. ^[38][39][40] With oil at $120/barrel a savings of a factor of 3 on heating costs is possible. When crude oil was at $25/barrel there was no economic incentive to switch to a grain fed heater.

US government policy

Further information: Agricultural policy of the United States

Some argue that the US government policy of encouraging ethanol from corn is the main cause for food price increases. ^{[15] [41] [42] [43] [44] [45]} US Federal government ethanol subsidizes total $7 billion per year, or $1.90 per gallon. ^[46] Corn is used to feed chickens, cows, and pigs. So higher corn prices lead to higher chicken, beef, pork, milk, cheese, etc.

With the high profitability of growing corn, more and more farmers switch to growing corn until the profitability of other crops goes up to match that of corn. So the ethanol/corn subsidies drive up the prices of other farm crops.

The US - an important export country for food stocks - will convert 18% of its grain output to ethanol in 2008. Across the US, 25% of the whole corn crop went to ethanol in 2007. ^[1] The percentage of corn going to biofuel is expected to go up. ^[47]

Proposed action

Freeze on biofuel production

Environmental campaigner George Monbiot has argued for a 5-year freeze on biofuels while their impact on poor communities and the environment is assessed.^{[48] [49] [50]} Lord Oxburgh has suggested that Monbiot has "gone too far" with his comments,^[8] and one problem with Monbiot's approach is that economic drivers are required in order to push through the development of more sustainable second-generation biofuel processes: these will be stalled if biofuel production decreases.

A recent UN report on biofuel also raises issues regarding food security and biofuel production. Jean Ziegler, the UN Special Rapporteur on food, concluded that while the argument for biofuels in terms of energy efficiency and climate change are legitimate, the effects for the world's hungry of transforming wheat and maize crops into biofuel are "absolutely catastrophic," and terms such use of arable land a "crime against humanity." Ziegler also calls for a 5-year moratorium on biofuel production.^[48] Food surpluses exist in many developed countries. For example, the UK wheat surplus was around 2 million tonnes in 2005.^[51] This surplus alone could produce sufficient bioethanol to replace around 2.5% of the UK's petroleum consumption, without requiring any increase in wheat cultivation or reduction in food supply or exports. However, above a few percent,^[52] there would be direct competition between first generation biofuel production and food production. This is one reason why many view second generation biofuels as increasingly important.

Non-food crops for biofuel

There are different types of biofuels and different feedstocks for them, and it has been proposed that only non-food crops be used for biofuel. This avoids direct competition for commodities like corn and edible vegetable oil. However, as long as farmers can make more money by switching to biofuels they will. ^[53][54] The law of supply and demand predicts that if fewer farmers are producing food the price of food will rise. ^[55]

Non-food crops like Jatropha, used for biodiesel, can thrive on marginal agricultural land where many trees and crops won't grow, or would produce only slow growth yields. Jatropha cultivation provides benefits for local communities:

Cultivation and fruit picking by hand is labour-intensive and needs around one person per hectare. In parts of rural India and Africa this provides much-needed jobs - about 200,000 people worldwide now find employment through jatropha. Moreover, villagers often find that they can grow other crops in the shade of the trees. Their communities will avoid importing expensive diesel and there will be some for export too.^[56]

Cellulosic ethanol is a type of biofuel produced from lignocellulose, a material that comprises much of the mass of plants. Corn stover, switchgrass, miscanthus and woodchip are some of the more popular non-edible cellulosic materials for ethanol production. Commercial investment in such second-generation biofuels began in 2006/2007, and much of this investment went beyond pilot-scale plants. Cellulosic ethanol commercialization is moving forward rapidly. The world’s first commercial wood-to-ethanol plant began operation in Japan in 2007, with a capacity of 1.4 million liters/year. The first wood-to-ethanol plant in the United States is planned for 2008 with an initial output of 75 million liters/year.^[57]

Other second generation biofuels may be commercialized in the future and compete less with food. Biofuel from algae could use much less land and freshwater and so competes less with food production. Synthetic fuel can be made from coal or biomass and may be commercialized soon.

Biofuel from food byproducts

Biofuels can also be produced from the waste byproducts of food-based agriculture (such as citrus peels^[58] or used vegetable oil^[59]) to manufacture an environmentally sustainable fuel supply, and reduce waste disposal cost.^[60] Collocation of a waste generator with a waste-to-ethanol plant can reduce the waste producer's operating cost, while creating a more-profitable ethanol production business. This innovative collocation concept is sometimes called holistic systems engineering. Collocation disposal elimination may be one of the few cost-effective, environmentally-sound, biofuel strategies, but its scalability is limited by availability of appropriate waste generation sources. For example, millions of tons of wet Florida-and-California citrus peels cannot supply billions of gallons of biofuels. Due to the higher cost of transporting ethanol, it is a local partial solution, at best.

End biofuel subsidies and tariffs

Some people have claimed that ending subsidies and tariffs would enable sustainable development of a global biofuels market. Taxing biofuel imports while letting petroleum in duty-free does not fit with the goal of encouraging biofuels. Ending mandates, subsidies, and tariffs would end the distortions that current policy is causing. ^[61] Some US senators advocate reducing subsidies for corn based ethanol. ^[62] The US ethanol tariff and some US ethanol subsidies are currently set to expire over the next couple years. ^[63] The EU is rethinking their biofuels directive due to environmental and social concerns. ^[64] On January 18 2008 the UK House of Commons Environmental Audit Committee raised similar concerns, and called for a moratorium on biofuel targets. ^[65] Germany ended their subsidy of biodiesel on Jan 1 2008 and started taxing it. ^[66]

Reduce farmland reserves and set asides

Some countries have programs to hold farmland fallow in reserve. The current crisis has prompted proposals to bring some of the reserve farmland back into use.

The American Bakers Association has proposed reducing the amount of farmland held in the US Conservation Reserve Program. ^[67] Currently the US has 34,500,000 acres in the program.

In Europe about 8% of the farmland is in set aside programs. Farmers have proposed freeing up all of this for farming. ^[68][69]

Sustainable production of biofuels

Main article: Sustainable biofuel

Second generation biofuels are now being produced from the cellulose in dedicated energy crops (such as perennial grasses), forestry materials, the co-products from food production, and domestic vegetable waste. Advances in the conversion processes^[70] will almost certainly improve the sustainability of biofuels, through better efficiencies and reduced environmental impact of producing biofuels, from both existing food crops and from cellulosic sources.^[71]

Lord Ron Oxburgh suggests that responsible production of biofuels has several advantages:

Produced responsibly they are a sustainable energy source that need not divert any land from growing food nor damage the environment; they can also help solve the problems of the waste generated by Western society; and they can create jobs for the poor where previously were none. Produced irresponsibly, they at best offer no climate benefit and, at worst, have detrimental social and environmental consequences. In other words, biofuels are pretty much like any other product.^[72]

Far from creating food shortages, responsible production and distribution of biofuels represents the best opportunity for sustainable economic prospects in Africa, Latin America and impoverished Asia. Biofuels offer the prospect of real market competition and oil price moderation. According to the Wall Street Journal, crude oil would be trading 15 per cent higher and gasoline would be as much as 25 per cent more expensive, if it were not for biofuels. A healthy supply of alternative energy sources will help to combat gasoline price spikes.^[37]

Impact on poor countries

Demand for fuel in rich countries is now competing against demand for food in poor countries. Cars, not people, used most of the increase in world grain consumption in 2006. The grain required to fill a 25-gallon SUV gas tank with ethanol will feed one person for a year. ^[73]

Several factors combine to make recent grain and oilseed price increases impact poor countries more:

• The World Bank estimated that in 2001 there were 2.7 billion people who lived in poverty on less than US$ (PPP) 2 per day. ^[74] This was nearly half the 2001 world population of 6 billion.
• While rich people buy processed and packaged foods like Wheaties, where prices don't change much if wheat prices go up, poor people buy more grains like wheat and feel the full impact of grain price changes.^[75][76]
• Poor people spend a higher portion of their income on food, so higher food prices hurt them more, unless they are farmers. If a poor person spends 60% of their money on food and then the food prices double, they will be in trouble. So higher grain and oilseed prices will affect poorer countries more.^{[77] [78]}
• Aid organizations that buy food and send it to poor countries are only able to send half as much food on the same budget if prices double. But the higher prices mean there are more people in need of aid. ^[79]

The impact is not all negative. Poor countries that do substantial farming have increased profits due to biofuels. If vegetable oil prices double, the profit margin could more than double. In the past rich countries have been dumping subsidized grains at below cost prices into poor countries and hurting the local farming industries. With biofuels using grains the rich countries no longer have grain surpluses to get rid of. Farming in poor countries is seeing healthier profit margins and expanding. ^[15]

National Corn Growers Association

US government subsidies for making ethanol from corn have been attacked as the main cause of the food vs fuel problem. ^{[15] [41][42][43][44][45]} To defend themselves, the US corn growers association has published their views on this issue. ^{[80] [81] [82]} They consider the "food vs fuel" argument to be a fallacy that is "fraught with misguided logic, hyperbole and scare tactics."

Claims made by the NCGA include:

• Corn growers have been and will continue to produce enough corn so that supply and demand meet and there is no shortage. Farmers make their planting decisions based on signals from the marketplace. If demand for corn is high and projected revenue-per-acre is strong relative to other crops, farmers will plant more corn. In 2007 US farmers planted 92.9 million acres with corn, 19% more acres than they did in 2006.

• The U.S. has doubled corn yields over the last 40 years and expects to double them again in the next 20 years. With twice as much corn from each acre, corn can be put to new uses without taking food from the hungry or causing deforestation.

• US consumers buy things like corn flakes where the cost of the corn per box is around 5 cents. Most of the cost is packaging, advertising, shipping, etc. Only about 19% of the US retail food prices can be attributed to the actual cost of food inputs like grains and oilseeds. So if the price of a bushel of corn goes up, there may be no noticeable impact on US retail food prices. The US retail food price index has gone up only a few percent per year and is expected to continue to have very small increases.

• Most of the corn produced in the US is field corn, not sweet corn, and not digestible by humans in its raw form. Most corn is used for livestock feed and not human food, even the portion that is exported.

• Only the starch portion of corn kernels is converted to ethanol. The rest (protein, fat, vitamins and minerals) is passed through to the feed coproducts or human food ingredients.

• One of the most significant and immediate benefits of higher grain prices is a dramatic reduction in federal farm support payments. According to the USDA, corn farmers received $8.8 billion in government support in 2006. Because of higher corn prices, payments are expected to drop to $2.1 billion in 2007, a 76 percent reduction.

• While the EROEI and economics of corn based ethanol are a bit weak, it paves the way for cellulosic ethanol which should have much better EROEI and economics.

• While basic nourishment is clearly important, fundamental societal needs of energy, mobility, and energy security are too. If farmers crops can help their country in these areas also, it seems right to do so.

Controversy within the international system

The United States and Brazil lead the industrial world in global ethanol production, with Brazil as the world's largest exporter and biofuel industry leader.^[83] In 2006 the U.S. produced 18.4 billion liters (4.86 billion gallons), closely followed by Brazil with 16.3 billion liters (4.3 billion gallons),^[9] producing together 70% of the world's ethanol market and nearly 90% of ethanol used as fuel.^[84] These countries are followed by China with 7.5%, and India with 3.7% of the global market share.^[85]

Since 2007, the concerns, criticisms and controversy surrounding the food vs biofuels issue has reached the international system, mainly heads of states, and inter-governmental organizations (IGOs), such as the United Nations and several of its agencies, particularly the Food and Agriculture Organization (FAO) and the World Food Programme (WFP); the International Monetary Fund; the World Bank; and agencies within the European Union.

The 2007 controversy: Ethanol diplomacy in the Americas

In March 2007, "ethanol diplomacy" was the focus of President George W. Bush's Latin American tour, in which he and Brazil's president, Luiz Inacio Lula da Silva, were seeking to promote the production and use of sugar cane based ethanol throughout Latin America and the Caribbean. The two countries also agreed to share technology and set international standards for biofuels.^[83] The Brazilian sugar cane technology transfer will permit various Central American, such as Honduras, Nicaragua, Costa Rica and Panama, several Caribbean countries, and various Andean Countries tariff-free trade with the U.S. thanks to existing concessionary trade agreements. Even though the U.S. imposes a USD 0.54 tariff on every gallon of imported ethanol, the Caribbean nations and countries in the Central American Free Trade Agreement are exempt from such duties if they produce ethanol from crops grown in their own countries. The expectation is that using Brazilian technology for refining sugar cane based ethanol, such countries could become exporters to the United States in the short-term.^[86] In August 2007, Brazil's President toured Mexico and several countries in Central America and the Caribbean to promote Brazilian ethanol technology.^[87]

This alliance between the U.S. and Brazil generated some negative reactions. While Bush was still on São Paulo as part of the 2007 Latin American tour, Venezuela's President Hugo Chavez, from Buenos Aires, dismissed the ethanol plan as "a crazy thing" and accused the U.S. of trying "to substitute the production of foodstuffs for animals and human beings with the production of foodstuffs for vehicles, to sustain the American way of life."^[88] Chavez complaints were quicky followed by the then Cuba's President Fidel Castro, who wrote that "you will see how many people among the hungry masses of our planet will no longer consume corn." "Or even worse," he continued, "by offering financing to poor countries to produce ethanol from corn or any other kind of food, no tree will be left to defend humanity from climate change."'^[89] Even Daniel Ortega, Nicaragua's President, and one of the preferencial recipients of Brazil technical aid, said that "we reject the gibberish of those who applaud Bush's totally absurd proposal, which attacks the food security rights of Latin Americans and Africans, who are major corn consumers", however, he voiced support for sugar cane based ethanol during Lula's visit to Nicaragua.^[90][91]

The 2008 controversy: Global food prices

As a result of the international community's concerns regarding the steep increased in food prices, on April 14, 2008, Jean Ziegler, the United Nations Special Rapporteur on the Right to Food, at a UN's Food and Agriculture Organisation (FAO) meeting in Brasilia, called biofuels a "crime against humanity",^[92][93] a claim he had previously made in October 2007, when he called for a 5-year ban for the conversion of land for the production of biofuels.^[94][95] The previous day, at their Annual IMF and World Bank Group meeting at Washington, D.C., the World Bank's President, Robert Zoellick stated that "While many worry about filling their gas tanks, many others around the world are struggling to fill their stomachs. And it's getting more and more difficult every day." ^[96][97][98]

Brazilian President, Luiz Inácio Lula da Silva gave a strong rebuttal, calling both claims "fallacies resulting from commercial interests", and putting the blame instead on U.S. and European agricultural subsidies, and a problem restricted to U.S. ethanol produced from maize.^[11][99] He also said that "biofuels aren't the villain that threatens food security."^[93] In the middle of this new wave of criticism, Hugo Chavez reaffirm his opposition and said that he is concerned that "so much U.S.-produced corn could be used to make biofuel, instead of feeding the world's poor", calling the U.S initiative to boost ethanol production during a world food crisis a "crime."^[100]

German Chancellor Angela Merkel said the rise in food prices are due to poor agricultural policies and changing eating habits in developing nations, not biofuels as some critics claim.^[101] On the other hand, British Prime Minister Gordon Brown called for international action and said Britain had to be "selective" in supporting biofuels, and depending on the U.K. assesment of biofuels impact on world food prices, "we will also push for change in EU biofuels targets".^[102] Stavros Dimas, European Commissioner for the Environment said through a spokewoman that "there is no question for now of suspending the targe fixed for biofuels", though he acknowledged that the EU had underestimated problems caused by biofuels.^[103]

On April 29, 2008, U.S. President George W. Bush declared during a press conference that "85 percent of the world's food prices are caused by weather, increased demand and energy prices", and recognized that "15 percent has been caused by by ethanol". He added that "the high price of gasoline is going to spur more investment in ethanol as an alternative to gasoline. And the truth of the matter is it's in our national interests that our farmes grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us." Regarding the effect of agricultural subsidies on rising food prices, Bush said that "Congress is considering a massive, bloated farm bill that would do little to solve the problem. The bill Congress is now considering would fail to eliminate subsidy payments to multi-millionaire farmers", he continued, "this is the right time to reform our nation's farm policies by reducing unnecessary subsidies".^[104]

Just a week before this new wave of international controversy began, U.N. Secretary General Ban Ki-moon had commented that several U.N. agencies were conducting a comprehensive review of the policy on biofuels, as the world food price crisis might trigger global instability. He said "We need to be concerned about the possibility of taking land or replacing arable land because of these biofuels", then he added "While I am very much conscious and aware of these problems, at the same time you need to constanly look at having creative sources of energy, including biofuels. Therefore, at this time, just criticising biofuel may not be a good solution. I would urge we need to address these issues in a comprehensive manner." Regarding Jean Ziegler proposal for a five-year ban, the U.N. Secretary rejected that proposal.^[105]

See also

Sustainable development Portal

• Biofuelwatch
• Distillers grains
• Ethanol economy
• Vegetable oil economy

Bibliography

• Goettemoeller, Jeffrey; Adrian Goettemoeller (2007), Sustainable Ethanol: Biofuels, Biorefineries, Cellulosic Biomass, Flex-Fuel Vehicles, and Sustainable Farming for Energy Independence, Praire Oak Publishing, Maryville, Missouri, ISBN 978-0-9786293-0-4 . See Chapter 7. Food, Farming, and Land Use. 

• The Worldwatch Institute (2007), Biofuels for Transport: Global Potential and Implications for Energy and Agriculture, Earthscan Publications Ltd., London, U.K., ISBN 978-1-84407-422-8 . Global view, includes country study cases of Brazil, China, India and Tanzania. 

References

External links

• FAO World Food Situation
• Plenty of Space for Biofuels in Europe
• Benefits of Distillers Grains, VeraSun
• World Bank, Biofuels: The Promise and the Risks. World Development Report 2008: Agriculture for Development

v • d • e Bioenergy Biofuels Algae fuel • Bagasse • Babassu oil • Biobutanol • Biodiesel • Biogas • Biogasoline • Cellulosic ethanol • Ethanol fuel • Vegetable oil Energy crops Chinese tallow • Hemp • Maize • Rapeseed • Sorghum bicolor • Soybean • Stover • Straw • Sugarcane • Sunflower Non food energy crops Energy forestry • Jatropha curcas • Miscanthus giganteus • Switchgrass Technology Bioconversion • Biomass heating systems • Biorefinery • Fischer-Tropsch process • Industrial biotechnology • Thermal depolymerization Concepts Cellulosic ethanol commercialization • Energy content of biofuel • EROEI • Food vs fuel • Sustainable biofuel