Worried that no one's going to post on ethanol today? Let me ease your troubled mind ...
The world may soon be facing the highest food prices in history, according to Lester Brown of the Earth Policy Institute. The group released a missive today that says increased corn demand caused by the ethanol boom will dramatically raise food costs in the near future:
The competition for grain between the world's 800 million motorists who want to maintain their mobility and its 2 billion poorest people who are simply trying to survive is emerging as an epic issue. Soaring food prices could lead to urban food riots in scores of lower-income countries that rely on grain imports, such as Indonesia, Egypt, Algeria, Nigeria, and Mexico. The resulting political instability could in turn disrupt global economic progress, directly affecting all countries. It is not only food prices that are at stake, but trends in the Nikkei Index and the Dow Jones 500 as well.
This is more than a little alarmist and extreme, and a nice argument could be made that the dumping of subsidized, overproduced U.S. corn in "lower-income countries", which undermines local markets and forces small farmers out of business, could stand to be staunched.
But choosing to produce more corn, and diverting that corn to ethanol production, is having and will have serious consequences, not only environmentally, as I've talked lots about here, but yes, probably on food prices too.
What I think will have an even greater impact on the lives of the less-fortunate residents of this planet (and ultimately, probably on all of us) is the destruction of tropical ecosystems to make way for fuel crops like oil palm.
It's funny, I've always viewed soybeans sort of on par with corn -- a lesser evil, since they're legumes and therefore fix nitrogen, but a vile member just the same of the two-punch agricultural nightmare we live here in Iowa. But lately, as farmers are increasingly going all-corn, all-the-time, I've been finding myself pining for the good old diverse days of corn and beans. Sigh.
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Lester Brown and I, diavlogging
The Copenhagen Conference on food security
Comments
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Zarkov Posted 7:54 am
04 Jan 2007
The oil mentality seems to have blinkered thought.
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Ron Steenblik Posted 8:13 am
04 Jan 2007
But I was (once again) flummoxed by Brown's continuing reluctance to mention subsidies as a factor driving the biofuel business. (In past missives he has only mentioned the high price of petroleum.)
That leads him to conclude with only a partial recommendation. "It is time for a moratorium on the licensing of new distilleries", he writes, "a time-out, while we catch our breath and decide how much corn can be used for ethanol without dramatically raising food prices."
Why not simply do away with the subsidies that are feeding the frenzy?
Then: "The policy goal should be to use just enough fuel ethanol to support corn prices and farm incomes but not so much that it disrupts the world food economy."
What new system -- given that nothing has worked in the past -- would enable the government to fine-tune support of corn prices and farm incomes ... not too hot, and not too cold, but just right? Details, please, Dr. Brown.
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Ron Steenblik Posted 8:42 am
04 Jan 2007
"It is time for a moratorium on the licensing of new distilleries, a time-out, while we catch our breath and decide how much corn can be used for ethanol without dramatically raising food prices."
Who is we in this case? The nation collectively? The USDA? A new Interstate Fuel-Food Tradeoff Commission? And say that "we" come up with some magic number for the amount of corn that can be used for ethanol without dramatically raising food prices (which will be a constantly moving target). What then?
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Julia Olmstead Posted 1:10 pm
04 Jan 2007
Let's see: we know he hates corn ethanol and hunger, too. He doesn't seem to mind subsidies but fears the havoc "urban food riots" could wreak on our stock portfolios. Hmm.
What gets me most though is that he seems, at least from his analysis in this latest missive, to have some wacky ideas about the root causes of hunger in the third world. Low global grain prices, which have been the standard for decades now, haven't seemed to do much to alleviate hunger. If we're talking about what hurts the impoverished (and particularly small farmers) I would say that artificially low corn prices (here are your subsidies again, Ron) have been much more harmful than the threat posed by ethanol.
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ffletcher Posted 1:44 am
05 Jan 2007
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KathyF Posted 1:48 am
05 Jan 2007
One reason comes quickly to mind: Iowa holds the first presidential caucus in the country, and fortunes rise or fall in Iowa. No candidate or would be candidate would dare speak out against subsidies or ethanol as long as he or she may one day need to win in Iowa.
That's one reason I'm glad Vilsack is in the race. Let's just skip Iowa altogether.
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Ron Steenblik Posted 1:58 am
05 Jan 2007
Interesting thought on the neutralizing role Vilsak could play, Kathy.
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Julia Olmstead Posted 2:17 am
05 Jan 2007
More importantly, it's our senators Harkin and Grassley who really do the ag policy work. I don't anticipate them changing course any time soon. I can only hope that gradually our representatives can be persuaded to support the redirection of farm support programs away from promoting corn and bean production. A lot of good could come from incentivizing farmers to practice working conservation -- things like incorporating alfalfa and other perennials into their cropping systems, putting livestock back on pasture, etc.
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DBLJ Posted 8:25 am
05 Jan 2007
Meat prices WILL be higher, but is that a bad thing? Meat consumption is at it's highest level in human history, and along with it increased health problems. Besides the leftovers from the ethanol process have to be used in some form so feeding it to animals is seen as not having as big an impact as some would think.
However, I believe that even the meat industry is vastly niave about DDG's (the by-product) being a cheap feed source for animals. You will soon see more and more ethanol plants using DDG's as a fuel source for running the plant replacing natural gas.
The real debate needs to be focused on the production agriculture vs. the environment. More corn-on-corn WILL be planted and that means increased tillage, increased inputs i.e. fertilizer, pesticedes, herbicides, etc.
So what is the solution? I'm not that foolish to think their is but on solution but I will say that we need more 3rd crops!!!
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DBLJ Posted 8:29 am
05 Jan 2007
I also would question why he supported socialism for the rich by instituitng the Iowa Values Fund that has paid out millions to Wells Fargo and Wells Blue Bunny to name a few.
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