28 Jan US Ethanol is fueling world hunger
posted Jan 28, 2013 from Seattle
On Tuesday, Jan 20, 2013, the small ad shown below will be running in the A-section of the Seattle Times.
The Jan/Feb 2013 Utne Reader has published an excerpt from Lester Brown’s new book Full Planet, Empty Plates.
Brown recaps two recent, troubling trends: the increase in world food prices and the decrease in world grain reserves in the last 5 or 7 years. I don’t want to paraphrase Brown but he suggests we are perhaps one bad world harvest away from calamitous disaster, and that that disaster is essentially already here now for the world’s poorest billion, who by and large live in Egypt, sub-Saharan Africa and India.
Then Brown lists factors which have changed in this time period. Of these, most are intransigent: The population continues to rise dramatically; People are getting richer and moving up the food chain; Productivity of industrial agriculture is reaching a temporary or permanent “ceiling,” as the per-acre yield increases that characterized previous decades seem to be leveling off; and drought and higher temperatures resulting from climate change are actively affecting agricultural output.
Looking at these factors one is struck by how difficult they are to change. In the case of people rising out of poverty, we don’t even want to change that. But then there is one completely new source of demand for grain: the automobile. It’s the one big factor driving hunger that could be changed by a simple act of political will.
In 2011, the US harvest of grain was 400 million tons. Of this, 127 million tons was removed from the food chain entirely and used for automobiles. (Europe has similar biofuel mandates.) As Brown puts it, the advent of biofuel “sets the stage for competition for the grain harvest between the affluent owners of the world’s 1 billion automobiles and the world’s poorest people.”
But here let me quibble with Brown. It’s not really a “competition” for grain between automobile owners and the food-eaters. This suggests something that’s not happening: a free market competition between two groups who would use the same resource. But there’s nothing free-market about this. Government mandates such as those in 2007 US Energy bill have put the food buyer at the back of the line when it comes to buying grain. The favored automobile is guaranteed and mandated to receive it’s “target” amount of Ethanol.
Indeed there is a belief out here in America that Ethanol is “subsidized.” If it were (one subsidy, never crucial, has recently been removed), it wouldn’t be such a huge problem. Mandates have the power to wreak havoc in the market in ways that simple subsidies don’t.
If you own a car with an internal-combustion engine in America, you are coerced into buying ethanol regardless of your politics or whether you may conscientiously object to governments forcing people to use food for fuel.
Ethanol is widely regarded as some kind of do-gooder program. That is a lavish tribute to some brilliant PR firm—remember those mindless feel-good ads, “Think yellow—Go Green?” It uses almost half the US corn crop to fuel less than 10% of the motor transport fleet and these numbers more or less prove it’s failure. Imagine tripling those numbers—no one would ever eat again! The environmental organizations that have given cover to the Ethanol purveyors should reverse course publicly and mea culpa immediately.
Perhaps the actual reason we have biofuel mandates may be insidious. They could have resulted from an effort to manipulate land and commodity prices by the Archer Daniels Midlands Corporation, Cargill and other big players in agribusiness. The corporate leadership of these entities always understood, (as the press never did and still doesn’t) that adding significant demand on the margin would create an immediate upward price spike, and that’s of course nothing but good for the biggest players and traders in these commodities and in land.
Aside from human hunger, another lasting tragedy of biofuel mandates is that land grabs have become common in the third world, where poor farmers, not to mention forest-dwelling tribespeople have poor documentation of their ownership of the land, as well as poor representation in corrupt political regimes, and are getting pushed off the land for biofuel-producing firms based in the rich countries.