Biofuelling the Food Crisis

The kilometre upon kilometre of tall maize waving to the horizon around the Nebraskan town of Carleton looks perfect to farmers such as Mark Jagels. He farms 1 000ha, the price of maize has never been higher, and the future has seldom seemed rosier. Carleton is booming, with $200-million put up for a new biofuel factory and, after years in the doldrums, there is full-time, well-paid work for 50 people.

But there is a catch. The same fields that surround Jagels’s house may be bringing new money to rural America, but they are also helping to push up the price of bread in Manchester, tortillas in Mexico City and beer in Madrid. As a direct result of what is happening in places like Nebraska, food aid for the poorest in Southern Africa, pork in China and beef in Britain are all more expensive.

Challenged by President George Bush to produce 133-billion litres of non-fossil transport fuels by 2017 to reduce United States dependency on imported oil, Jagels and thousands like him are patriotically turning the US corn belt from the bread basket of the world into an enormous fuel tank. Only a year ago, their maize mostly went to cattle feed or was exported as food aid. Come harvest time, almost all will end up at the new plant at Carleton, where it will be fermented to make ethanol.

The era of “agrofuels” has arrived, and the scale of the changes it is already forcing on farming and markets around the world is immense. In Nebraska alone, an extra 250 000ha of maize have been planted this year, and the state boasts it will produce 3,8-billion litres of ethanol. Across the US, 20% of the whole maize crop went to ethanol last year. How much is that? Just 2% of US automobile use.

Jagels is part of a global green rush, one of the greatest shifts that world agriculture has seen in decades. As the US, Europe, China, Japan and other countries commit themselves to using 10% or more alternative automobile fuels, farmers everywhere are rushing to grow maize, sugar cane, palm oil and oil seed rape, all of which can be turned into ethanol or other biofuels for automobiles. But that means getting out of other crops.

The scale of the change is mind boggling. The Indian government says it wants to plant 3 140 000 square kilometres of biofuel crops, Brazil as much as 1,2-million square kilometres. Southern Africa is being touted as the future Middle East of biofuels, with as much as four million square kilometres of land ready to be converted to crops such as Jatropha curcas (physic nut), a tough shrub that can be grown on poor land.

Prices

While this may be marginally better for carbon emissions, it is proving horrendous for food prices. A year or two ago, almost all the land where maize is now being grown to make ethanol in the US was being farmed for human or animal food. And because the US exports most of the world’s maize, its price has doubled in 10 months, and wheat has risen about 50%.

“In June, wheat prices across the US and Europe hit their highest levels in more than a decade,” says Mark Hill, food partner at the business advisory firm Deloitte. “These price hikes are likely to trigger inflation in food prices, as processors are forced to pay increased costs for basic ingredients such as corn and wheat.”

The era of cheap food is over, says Hill. World commodity prices of sugar, milk and cocoa have all surged, prompting the biggest increase in retail food prices in three decades in some countries. “Meat, too, will cost more because chicken and pigs are fed largely on grain,” says Hill.

But the surge in demand for agrofuels is hitting the poor and the environment the hardest. The United Nations World Food Programme, which feeds about 90-million people mostly with US maize, reckons that 850-million people around the world are already undernourished. There will soon be more because the price of food aid has increased 20% in just a year.

“The competition for grain between the world’s 800-million motorists, who want to maintain their mobility, and its two billion poorest people, who are simply trying to survive, is emerging as an epic issue,” says Lester Brown, president of the Washington-based Worldwatch Institute think tank and author of the book Who Will Feed China?. It is not going to get any better, says Brown.

Food crisis

The food crisis, he warns, is only just beginning. What worries him as much as the new competition between food and fuel is that the booming Chinese and Indian populations -- the two largest nations in the world -- are giving up their traditional vegetable-rich diets to adopt typical “American” diets that contain more meat and dairy products. Meat demand in China has quadrupled in 30 years, and in India, milk and egg products are increasingly popular.

In itself, this is no problem, say Brown and others, except that it means an accelerated demand for water to grow more food. It takes 7kg of grain to produce 1kg of beef, and increased demand will require huge amounts of grain-growing land. Much of this, of course, will need to be irrigated.

“Water tables are now falling in countries that contain over half the world’s people,” Brown points out. “While numerous analysts and policymakers are concerned about a future of water shortages, few have connected the dots to see that a future of water shortages means a future of food shortages.”

New figures from the World Bank, he says, show that 15% of the world’s present food supplies, on which 160-million people depend, are being grown with water drawn from rapidly depleting underground sources or from rivers that are drying up. In large areas of China and India, the water table has fallen catastrophically.

Scientists are becoming increasingly alarmed. Earlier this year, water specialists from hundreds of institutes around the world published the biggest ever assessment of water and food. Their conclusions were chilling.

With the Earth’s water, land and human resources, it would be possible to produce enough food for the future, they said. “But it is probable that today’s food production and environmental trends will lead to crises in many parts of the world,” said David Molden, deputy director general of the International Water Management Institute.

Climate change

Meanwhile, climate change is leading to more intense rains, unpredictable storms, longer-lasting droughts and interrupted seasons.

“I met leaders from Madagascar reeling from seven cyclones in the first six months of the year,” Josette Sheeran, director of the World Food Programme, told colleagues in Rome recently. “I asked them when the season ends and was told that such questions are becoming more difficult to answer. Farmers know that predictable patterns in weather are becoming a thing of the past. How does the global food-supply system deal with such changing risk?”

The answer is: with ever greater difficulty. The Intergovernmental Panel on Climate Change predicts that rain-dependent agriculture could be cut in half by 2020 as a result of climate change. “Anything even close to a 50% reduction in yields would obviously pose huge problems,” said Sheeran.

All this is far too gloomy, say other analysts and politicians. Earlier this year, Brazilian President Luiz Lula told the Guardian that there was no need for world food shortages, or any destruction of forests to grow more food at all. “Brazil has 3,2-million square kilometres of arable land, only a fifth of which is cultivated. Of this, less than 4% is used for ethanol production ... This is not a choice between food and energy.”

Others say that the food price rises now being seen are temporary and will fall back within a year as the market responds. Technologists pin their faith on GM crops, or drought- resistant crops, or trust that biofuel producers will develop technologies that require less raw material or use non-edible parts of food. The immediate best bet is that countries such as Argentina, Poland, Ukraine and Kazakhstan will grow more food for export as US output declines.

Back on the great plains, meanwhile, ethanol fever is running high. This time last year, there were fewer than 100 ethanol plants in the whole US, with a combined production capacity of five billion gallons. There are now at least 50 more new plants being built and more than 300 more are planned. If even half of them are finished, they will help to rewrite the politics of global food.