How the rich starved the world

World cereal stocks are at an all-time low, food-aid programmes have run out of money and millions face starvation. Yet wealthy countries persist with plans to use grain for petrol. Plus Iain Macwhirter on how food prices are rocketing

The irony is extraordinary. At a time when world leaders are expressing grave concern about diminishing food stocks and a coming global food crisis, our government brings into force measures to increase the use of biofuels - a policy that will further increase food prices, and further worsen the plight of the world's poor.

What biofuels do is undeniable: they take food out of the mouths of starving people and divert them to be burned as fuel in the car engines of the world's rich consumers. This is, in the words of the United Nations special rapporteur on the right to food, Jean Ziegler, nothing less than a "crime against humanity". It is a crime the UK government seems determined to play its part in abetting. The Renewable Transport Fuel Obligation (RTFO), introduced on 15 April, mandates petrol retailers to mix 2.5 per cent biofuels into fuel sold to motorists. This will rise to 5.75 per cent by 2010, in line with European Union policy.

The message could not have been clearer if the Prime Min ister, Gordon Brown, had personally put a torch to a pyre of corn and rice in Parliament Square: even as you take to the streets to protest your empty bellies and hungry children, we will burn your food in our cars. The UK is not uniquely implicated in this scandal: the EU, the United States, India, Brazil and China all have targets to increase biofuels use. But a look at the raw data confirms today's dire situation. According to the World Bank, global maize production increased by 51 million tonnes between 2004 and 2007. During that time, biofuels use in the US alone (mostly ethanol) rose by 50 million tonnes, soaking up almost the entire global increase.

Next year, the use of US corn for ethanol is forecast to rise to 114 million tonnes - nearly a third of the whole projected US crop. American cars now burn enough corn to cover all the import needs of the 82 nations classed by the UN's Food and Agriculture Organisation (FAO) as "low-income food-deficit countries". There could scarcely be a better way to starve the poor.

The threat posed by biofuels affects all of us. Global grain stockpiles - on which all of humanity depends - are now perilously depleted. Cereal stocks are at their lowest level for 25 years, according to the FAO. The world has consumed more grain than it has produced for seven of the past eight years, and supplies, at roughly only 54 days of consumption, are the lowest on record.

The president of the World Bank, Robert Zoellick, has already warned that 100 million people could be pushed deeper into poverty because of food price rises caused directly by this imbalance between supply and demand. Even consumers in rich countries are suffering. We now pay higher prices for our food in order to subsidise the biofuels industry, thanks to measures such as the renewable fuels directive.

This is not just a short-term price blip, but the beginnings of a major structural change in the world food market. Population pressure - still something of a taboo subject - is also certainly playing a part. With the world population growing by 78 million a year, and expected to reach nine billion by the middle of the century, there are simply many more mouths to feed.

In addition, rapid economic growth in India and China has created tens of millions of new middle-class consumers, all demanding western-style diets high in meat and dairy products, thereby vastly increasing the quantity of grain required for livestock production.

Weather plays a major role, too: the FAO's latest food situation brief reports that, in 2007, "unfavourable climatic conditions devastated crops in Australia and reduced harvests in many other countries, particularly in Europe", while Southern Africa and the western United States have been hit hard by severe drought. Rising oil prices also increase the cost of food, as fossil fuels are important throughout the agricultural process, from tractor diesel to fertiliser
production.

Inconsistency

The most important structural change, however, is the increasing interlinking of world energy and food markets. Once, food was just for people. Now rising demand for transport fuel - particularly in rich countries - is sucking supply away from the world food market and increasing the upward pressure on prices. In the words of Josette Sheeran, executive director of the UN World Food Programme (WFP): "We are seeing food in many places in the world priced at fuel levels," with increasing quantities of food "being bought by energy markets" for biofuels.

Rising oil prices feed back into the process. With food and fuel markets intertwined, increases in the price of oil are shadowed by increases in the price of grain. The real-world result from this structural shift may be that hundreds of thousands of people starve in the next few years - unless policies promoting biofuels are urgently reversed.

This is not to suggest that government targets on biofuels are driven by some kind of malicious desire to starve the world's poor. Indeed, both Brown and his Chancellor, Alistair Darling, have expressed concern about the food supply crisis and the role of biofuels in causing it. But for these two political leaders to voice their concerns while allowing the increased use of biofuels in the UK to be pushed forward - all in the same week - is nothing short of bizarre.

As Oxfam's Robert Bailey puts it: "This inconsistency at the highest levels simply beggars belief." The aid agency calculates that the RTFO represents a £500m annual subsidy from motorists and taxpayers to the biofuels industry - more than double the amount the WFP is urgently seeking from donor countries to try to mitigate the impact of food price rises on the world's poor.

The EU, meanwhile, persists in the erroneous belief that biofuels can help reduce greenhouse-gas emissions. The main reason for its speedy introduction of the replacement fuel initiative was as a sop to motor manufacturers who were lobbying hard against proposed higher fuel economy standards. With biofuels, the EU hoped, it could cave in to the car industry while still getting reduction in emissions.

Yet recent research suggests otherwise: two major studies published in Science magazine in February showed clearly that once the agricultural displacement effects of the new fuels on rainforests, peatlands and grasslands are taken into account, emissions are many times worse than from conventional mineral petrol. In other words, it would be better for the climate if we just went back to fossil fuels. Biofuels are not a "necessary but painful" way of saving the climate; they are a calamitous mistake by almost every criterion, whether social, ethical or environmental.

Reversing the damage

The industry claims that "second-generation" biofuels, using by-products such as corn stalks and woodchip as a feedstock, will be able to redress the balance. But if this technological advance is achieved (and that is by no means certain) it could usher in an even worse scenario: the annihilation of the world's forests. If all plant life was seen as potentially convertible for transport fuel, there would be nothing to stop what was left of the planet's biosphere from being strip-mined to keep rich motorists on the road. There is no simple solution. Much of the increased biofuel demand comes from the US, where Democratic and Republican politicians alike have talked themselves into a dead-end search for "energy security" - with US-grown corn top of the list.

But the UK and the EU can reverse some of the damage by immediately ditching their own biofuels policies and providing vital aid funding, principally through the WFP, to help prevent widespread starvation in the short term. Politicians need to realise that there is no such thing as "sustainable biofuels", either now or in the future. As for investors, they need to realise that pouring money into biofuels is a bad bet: subsidies will be quickly withdrawn when policymakers face up to the reality of their ghastly error.

In the meantime, millions face starvation and death from increasing hunger and malnutrition. There is no time to lose.

2008: the year of food riots

Egypt Thousands of demonstrators in Mahalla el-Kobra loot shops and throw bricks at police during protests at rising food prices and low salaries, as part of nationwide strike

Haiti At least four people killed in the southern city of Les Cayes after food prices rise 50 per cent in the past year

Côte d’Ivoire Police injure more than ten protesters as several hundred demonstrators demand government action to curb food prices

Cameroon Riots last four days and result in at least 40 deaths. Unrest is due to high fuel and food prices. Worst riots in country for 15 years

Mozambique At least four people killed and 100 injured following fuel price rises

Senegal Violent demonstrations in Dakar as prices of rice, milk and oil soar. Senegal imports almost all its food

Yemen Five days of rioting and a hundred arrests after the price of wheat doubled over two months. Protesters set up roadblocks in Sana’a and Aden

...and in Mauritania, Bolivia, Indonesia, Mexico, India, Burkina Faso, and Uzbekistan

http://www.newstatesman.com/200804170025