UK newspaper The Guardian claims it has laid its hands on a copy of a forthcoming World Bank report on biofuels and world food prices. Unlike many previous analyses which said that biofuels programs were a minimal contributor to food price rises, the rumored World Bank report says that over half of the rise in food prices since 2002 can be attributed to biofuels programs.
The report analyzes a basket of food prices; the basket has risen a total of 140% in price in the last six years. The report attributes about a 15% price rise to higher energy costs and fertilizer expenses, while saying that a 75% price rise is due to the biofuels. I wrote about this back in April, and – if this alleged World Bank report pans out – it looks like I somewhat underestimated the impact that biofuels have had on food prices and somewhat overestimated the impact of fuel and fertilizer.
First off, I’m not 100% convinced that the report is accurate – for one thing, it’s easy for newspapers to get things like this wrong. (especially with non-published reports) Secondly, reports of this nature can be directed by the writer(s) to achieve certain desired argument results. There are numerous other reports by credible sources that refute this claim that are published and peer reviewed.
Regardless of truth, however, I do not think it’s a huge blow to biofuels. The fact of the matter is that we must make a global move towards renewable energy. That transition is going to involve costs, and higher food prices might be one of them. For many years, the US has been the low cost producer of food for the globe, in much the same way that Saudi Arabia has been the low cost producer of oil – and Saudi Arabia is still the lowest-cost producer, even with oil at $144 a barrel and rising. We will continue to be a food exporter – our huge area of arable land and relatively small population pretty much guarantee that – but at the same time, we have to move towards energy independence for our country. That means developing our own energy infrastructure, both in conventional drilling and in sustainable power sources like nuclear, and by making a serious and sustained commitment to truly renewable sources of power – wind, solar, and biofuels.
If biofuels production does persistently drive higher food prices, then that will create a strong incentive for farmers and agronomists to develop crops that are suited for biofuels production, but that do not displace food crops. In other words, biofuels might end up increasing the size of the total farm economy, rather than just shifting food production to fuel production. Crops like switchgrass and miscanthus are a start, but they tend to grow best on prime farmland – what is needed are plants which provide a decent energy density even when grown on land that isn’t well-suited to food production. That can provide us the best of both worlds – high food production and biofuels production at the same time.
Bottom line; US farmers and people involved in agriculture will be key players the economic future of this country and will be called on to react-to and solve fundamental global need for both food and fuel.




Comments
Post has no comments.