Food crisis? Okay. We didn't want to know about the credit crisis five years ago (wish we'd done something about that earlier). We didn't want to let go of our easy, easy plastic money then. We don't want to know about a food crisis now. But five years from now we may be asking ourselves how we got scammed by the development of biofuel in much the same way we did by easy money.
There have already been food riots around the world. Food-supplying countries, from Ukraine to Argentina, have been limiting exports in an attempt to protect domestic consumers, leading to angry protests from farmers — and making things even worse in countries that need to import food.
How did this happen? The answer is a combination of long-term trends, bad luck — and bad policy.
And larger populations in China, and oil prices, and damaging weather. All of these factors are interconnected. Paul Krugman looks at what must be done.
Politicians and governments that have stood in the way of action on greenhouse gases bear some responsibility for food shortages. Where the effects of bad policy are clearest, however, is in the rise of demon ethanol and other biofuels. The subsidized conversion of crops into fuel was supposed to promote energy independence and help limit global warming. But this promise was, as Time magazine bluntly put it, a “scam.”
Those large, increasingly prosperous populations in China and other developing countries are eating more meat. It takes "about 700 calories’ worth of animal feed to produce a 100-calorie piece of beef, this change in diet increases the overall demand for grains," Krugman reminds us. So food demands are competing against demands for biofuel. Biofuel is extremely costly in every respect.
This is especially true of corn ethanol: even on optimistic estimates, producing a gallon of ethanol from corn uses most of the energy the gallon contains. But it turns out that even seemingly “good” biofuel policies, like Brazil’s use of ethanol from sugar cane, accelerate the pace of climate change by promoting deforestation.
And meanwhile, land used to grow biofuel feedstock is land not available to grow food, so subsidies to biofuels are a major factor in the food crisis. You might put it this way: people are starving in Africa so that American politicians can court votes in farm states.
Don't look to John McCain, Barack Obama, or Hillary Clinton to make any changes in the system.
Oh, and in case you’re wondering: all the remaining presidential contenders are terrible on this issue.
The "need" for fashionable biofuel is no less damaging than what our "need" for easy credit. Both needs are provoking crises world-wide. When do we something about "a world food balance highly vulnerable to a crisis affecting many countries at once — in much the same way that the marketing of complex financial securities, which was supposed to diversify away risk, left world financial markets highly vulnerable to a systemwide shock"?
