“The end of cheap food era,” ran the headline of The Economist few months ago. The anticipation was but a prelude to an era that would witness a steady increase in food prices all over the world. Protests and demonstrations swept more than 30 countries and are still moving from one poor country to another, posing a serious threat to global social security
The world is divided nowadays over the reasons behind soaring food prices. Developing world leaders kept putting the blame on the developed countries policies of encouraging the production of bio-fuel, which, they argued, was the main driver behind skyrocketing crop prices. Bio-fuels, in fact, have become the favorite whipping boy for countries experiencing food shortages and rising food prices.
The developing countries’ calls for stopping bio-fuel production were joined by UN officials who adopted the same point of view. Jean Ziegler, the United Nations Special Rapporteur on the Right to Food, said that “the use of farmland for bio-fuel is a crime against humanity and is responsible for aggravating food shortages”, especially in some countries in Latin America.
Food and Agriculture Organization (FAO) Director General Jacques Diouf agrees. During the food crisis summit held recently in Rome, he argued that “it is incomprehensible that $11bn-$12bn a year in subsidies and protective tariff policies have the effect of diverting 100 million tons of cereals from human consumption, mostly to satisfy a thirst for vehicles”.
It is a viewpoint shared by global charitable organizations like Oxfam. Barbara Stocking of Oxfam thinks that “It takes the same amount of grain to fill an SUV with ethanol as it does to feed a person. We don’t want any more subsidies for bio-fuels. This rush to bio-fuels is absolutely dreadful.”
On the other side, the US, Brazil and the EU – the main players on the bio-fuel industry – maintain that soaring energy cost is to be blamed for food price hikes. “Bio-fuels are not the villain menacing food security in poor countries,” Brazil’s President Luiz Inacio Lula da Silva told heads of state in the FAO summit.
Brazil’s is one of the main countries whose tropical climate allows it to efficiently grow sugarcane for ethanol production, which now provides 40% of the country’s transport fuel. Small wonder then that the Brazilian President feels sorry “to see that many of those who blame ethanol – including ethanol from sugarcane – for the high price of food are the same ones who for decades have maintained protectionist policies to the detriment of farmers in poor countries and of consumers in the entire world.”
The US, which also heavily subsidizes corn cultivation for ethanol, still sticks to its position toward bio-fuel. The US administration insists on downplaying the effect of bio-fuels on soaring food prices. The US Agriculture Secretary Ed Schafer argued that bio-fuels account for “only 2-3% of the food price increases. We recognize that bio-fuels have an impact, but the real issue is about energy, increased consumption and weather-related issues in grain-producing countries.”
Some economists, in fact, are holding the same opinion. Oil at more than $130 per barrel, they argue, plays a much larger role in rising food prices than the conversion of crop and cropland to bio-energy production. They are of the opinion that higher non-farm labor costs, a few drought-induced harvest shortfalls, plus increased demand from developing nations and renewable fuels production accounts for even less of the recent upsurge in food prices.
Energy experts, however, say there can be a balance between bio-fuel and food crops if government will strictly monitor land use for both.
However, some researchers still see light in the end of the tunnel. Many a senior researchers at international researches centers are looking at crops like jatropha, for example, which is already experimented with in India, as holding hope for a future free from the difficult choice between food and fuel. Until this alternative becomes a viable one, poor countries have to hold their breath as it is highly unlikely that the plans of bio-fuel supporters will recede.