Biofuels: Global Friend or Foe?

The debate over biofuels has seriously heated up, with a number of different groups trumpeting the devastating effects biofuels have had on food prices and poor populations. Activists call the biofuel industry “fundamental immoral, diverting land which should be producing food to fill human stomachs to produce fuel for car engines,” according to the BBC. Jacques Diouf, director general of the United Nations Food and Agriculture Organization (FAO), agrees: at the UN food summit in Rome he called the annual subsidies of $11 - 12 billion “incomprehensible” and accused the international community of taking action only “when the media beam the distressing spectacle of world suffering into the homes of the wealthy countries,” says the EU Observer.

In a report released yesterday, “Another Inconvenient Truth” Oxfam claimed that the biofuel policies promoted by wealthy nations have forced more than 30 million people into poverty, pointing to data showing that biofuels have caused up to 30% of the rise in food prices. The U.S., the EU, and Brazil, the major producers of biofuels, take a different stance, putting greater blame for the food crisis on rising energy costs. Experts, however, urge leaders and the public to recognize that not all biofuels are the same: in the BBC article, Keith Wiebe, FAO agricultural economist, identifies Brazilian ethanol derived from sugarcane as the best option, noting its high energy, manufacturing efficiency, and low emissions.

The debate is emblematic of the often conflicting relationship between agricultural and energy needs, as the International Herald Tribune points out: while biofuels may be helping developed countries reduce greenhouse gas emissions and their dependence on foreign oil, they may also be causing grain shortages, causing commodity prices to rise. What is needed now is consensus and cooperative prioritization between countries. Click here to see how trade balances are being affected by rising food prices and also check out interesting Congressional testimony from the director general of the International Food Policy Research Institute (IFPRI).