The food versus fuel debate is back on the agenda with the launch of a map designed by anti-poverty organization ActionAid and the Environmental Working Group (EWG). The map shows which countries are at highest risk of a food crisis due to food price rises.
The organization says volatile food markets and food insecurity contributed to the civic unrest that recently brought down Egypt’s president. They link the food price crisis to the American insistence on subsidizing corn ethanol.
“When we send seven times as much corn to ethanol plants as we keep in our own stockpiles, the diversion of just a few more bushels sends shockwaves through commodity markets and food price indices”, said Sheila Karpf, legislative and policy analyst at EWG.
Corn ethanol
In fact, a Los Angeles Times report last week highlighted how corn ethanol is booming in America right now. Ethanol production hit record levels last year, and some companies are looking to expand, wrote the publication. This is a consequence of a federal mandate to quadruple the nation’s use of biofuels to 36 billion gallons annually by 2022 from 2008 levels. Corn ethanol gets almost half of that market, or 15 billion gallons. Besides federal incentives, some states have similar programs in place as well.
Altogether, three quarters of tax credits destined for renewable energy goes to ethanol. A combination of rising oil prices and increasing demand for ethanol has created a bullish market for the product. As a consequence, the U.S. has shifted 40 percent of corn production from food and feed to fuel, putting stress on corn supplies in a year when stocks are at the lowest level in decades, ActionAid said.
“We are teetering on a full-fledged global crisis and one trigger – rising oil prices, a spike in the cost of rice, an export ban, or climate related shortage of crops – could be the tipping point,” said Marie Brill, senior policy analyst at ActionAid USA. “To use storm terminology, we were in a food crisis watch last fall, which has escalated into a food crisis warning. The U.S. needs to be prepared and to take steps now to mitigate a food crisis and prevent future crises.”
Map
The map identifies 52 high-risk countries where people rely on 83 billion tons of imported food per year. 750 million individuals are already malnourished in those places. Corn is a main staple, alongside soybeans and wheat exported by the United States.
Half of these countries are experiencing food price hikes and 37 of them are heavy importers of corn. The average income in these places is $2 a day and people spend at least 55 per cent of their income on food.
The data which the map was based on was compiled from the United Nations’ Food and Agriculture Organization (FAO), the International Food Policy Research Institute (IFPRI), US Dept. of Agriculture’s Economic Research Service, the World Bank, ActionAid and EWG.
Article by Antonio Pasolini, appearing courtesy Justmeans.
1 comment
The “facts” of the map appear to be accurate, but EWG and ActionAid spokespersons are misinterpreting the data, assuming they are not intentionally distorting. The 40% of US corn referred to here goes to “non-food” uses, which is a mis-nomer in the first place, because almost all of that is intended for feeding livestock being raised to produce meat and dairy and poultry products. In fact, only about 4% of US corn is “lost” to fuel uses according to some recent statistics. Worldwide only 3.5% of grain crops are used for fuel.
There is no shortage of food. There is an inequitable delivery system for food that ignores the needs of the hungry in favor of those with the money. Is that “unfair”? Perhaps. It is probably less “just” than it should be, but meanwhile the price supports provided by modern (Western) countries for their farmers’ products have kept them cheaper than domestic producers can provide them locally in these emerging market countries, so the market for local grains never develops because it can’t compete with cheap imported food. At the same time, the United Kingdom, Canada and the USA all provide incentives to farmers NOT to grow crops.
More recently the Dept of Energy and the USDA have been offering growers incentives to plant new fields of “biomass” crops (not necessarily “food” crops to begin with, but grasses, and woody growths, and also subsidize the cost of delivery to “approved processing centers”. The program, called the Biomass Crop Assistance Program is one of the ones that Republicans have targeted to cut from the next budget. It is somewhat sad that something specific and constructive that is being done to promote biofuels (from biomass, which is mainly non-food crops anyway) may not survive. On the other hand, the “approved” conversion centers are all owned by one large ethanol company, POET, one of the already strongest biofuels companies in the country and probably far less in need of government support than many of the emerging companies that could really use federal financial help.
Sincerely,
Stafford “Doc” Williamson
p.s. Yes, there is a “food crisis” but it has to do with the other reasons for soaring prices cited in this article, the price of oil being the main cause. The export ban could be a factor in causing others to have to pay higher prices, but their is not shortage of supplies (except in the short term, perhaps) but the only country banning exports of grains thus far is already a net importer of grains in any case, so it was a “sensitive” subject politically for them.
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