Biofuels: a blessing or a curse?

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Yellow_corn_or_maizeFrom Foreign Affairs:

The enormous volume of corn required by the ethanol industry is sending shock waves through the food system. […] corn futures rose to over $4.38 a bushel, the highest in ten years.

Biofuels have tied oil and food prices together in ways that could [have] potentially devastating implications for both global poverty and food security.

[…] resorting to biofuels is likely to exacerbate world hunger. Several studies […] suggest that caloric consumption among the world’s poor declines by about half of one percent whenever the average prices of all major food staples increase by one percent.

When one staple becomes more expensive, people try to replace it with a cheaper one, but if the prices of nearly all staples go up, they are left with no alternative.

Food expenditures already consume over 50 percent of budgets in households at the bottom of the pyramid. In Nigeria, food accounts for 52 percent and in rural Pakistan 55 percent of BOP spending. A final statistic from the article:

Filling the 25-gallon tank of an SUV with pure ethanol requires over 450 pounds of corn – which contains enough calories to feed one person for a year.

Update: More on corn production and price volatility.

Join the Conversation

paul
July 10, 2007

What about the hundreds of millions (billions?) of corn subsistence farmers with a surplus to sell? If the world price of corn is at a record high, it must be giving them a little bit more income than usual. It would be interesting to see a map of winners and losers.

Dr James Daniel Paul
July 13, 2007

Generalisation

Some of the Bio-fuels are:

1. Ethanol

2. Bio-diesel (Jethropa)

3. Bio-gas

If ethanol is obtained from the molasses of sugar cane it reduces the molasses for the alcohol production and not the sugar production as it is the by product of the sugar.

In the case of Jetropa it is not a edible oil. How can it deprive food for masses?

In the case of the Bio-gas it is generated from the poultry / cattle excretes and that isn’t edible either.

Hence we may not be able to generalise the case of corn to the entire family of Bio-fuels.