Food vs fuel - AbsoluteAstronomy.com

Food vs. fuel is the dilemma regarding the risk of diverting farmland or crops for biofuel

Biofuel

Biofuel is a type of fuel whose energy is derived from biological carbon fixation. Biofuels include fuels derived from biomass conversion, as well as solid biomass, liquid fuels and various biogases...

s production in detriment of the food supply on a global scale. The "food vs. fuel" or "food or fuel" debate is international in scope, with good and valid arguments on all sides of this issue. There is disagreement about how significant the issue is, what is causing it, and what can or should be done about it.

Biofuel production has increased in recent years. Some commodities like maize

Maize

Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...

(corn), sugar cane or vegetable oil can be used either as food, feed, or to make biofuels. For example, since 2006, a portion of land that was also formerly used to grow other crops in the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

is now used to grow Corn for biofuels, and a larger share of corn is destined to ethanol

Ethanol

Ethanol, also called ethyl alcohol, pure alcohol, grain alcohol, or drinking alcohol, is a volatile, flammable, colorless liquid. It is a psychoactive drug and one of the oldest recreational drugs. Best known as the type of alcohol found in alcoholic beverages, it is also used in thermometers, as a...

production, reaching 25% in 2007. Some experts claim that since converting the entire grain harvest of the US would only produce 16% of its auto fuel needs, energy markets are effectively placed in competition with food markets for scarce arable land, resulting in higher food prices. A lot of R&D efforts are currently being put into the production of second generation biofuels

Second generation biofuels

Second generation biofuels - also known as advanced biofuels - can be manufactured from various types of biomass.Biomass is a wide-ranging term meaning any source of organic carbon that is renewed rapidly as part of the carbon cycle...

from non-food crops, crop residues and waste. Second generation biofuels

Second generation biofuels

could hence potentially combine farming for food and fuel and moreover, electricity could be generated simultaneously, which could be beneficial for developing countries and rural areas in developed countries.
With global demand for biofuels on the increase due to the oil price increases taking place since 2003 and the desire to reduce oil dependency as well as reduce GHG

Greenhouse gas

A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...

emissions from transportation, there is also fear of the potential destruction of natural habitats by being converted into farmland. Environmental groups have raised concerns about this trade-off for several years, but now the debate reached a global scale due to the 2007–2008 world food price crisis

2007–2008 world food price crisis

World food prices increased dramatically in 2007 and the 1st and 2nd quarter of 2008 creating a global crisis and causing political and economical instability and social unrest in both poor and developed nations. Systemic causes for the worldwide increases in food prices continue to be the subject...

. On the other hand, several studies do show that biofuel production can be significantly increased without increased acreage. Therefore stating that the crisis in hand relies on the food scarcity.

Brazil

Brazil

Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

has been considered to have the world's first sustainable biofuel

Sustainable biofuel

Biofuels, in the form of liquid fuels derived from plant materials, are entering the market, driven by factors such as oil price spikes and the need for increased energy security...

s economy and its government claims Brazil's sugar cane based ethanol industry has not contributed to the 2008 food crisis. A World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

policy research working paper released in July 2008 concluded that "...large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices", and also stated that "Brazil's sugar-based ethanol did not push food prices appreciably higher". However, a 2010 study also by the World Bank concluded that their previous study may have overestimated the contribution of biofuel production, as "the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors (the so-called ”financialisation of commodities”) may have been partly responsible for the 2007/08 spike." A 2008 independent study by OECD also found that the impact of biofuels on food prices are much smaller.

Food price inflation

From 1974 to 2005 real food prices (adjusted for inflation) dropped by 75%. Food commodity prices were relatively stable after reaching lows in 2000 and 2001. Therefore, recent rapid food price increases are considered extraordinary. A World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

policy research working paper published on July 2008 found that the increase in food commodities prices was led by grains, with sharp price increases in 2005 despite record crops worldwide. From January 2005 until June 2008, maize

Maize

prices almost tripled, wheat

Wheat

Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...

increased 127 percent, and rice

Rice

Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...

rose 170 percent. The increase in grain prices was followed by increases in fats and oil prices in mid-2006. On the other hand, the study found that sugar cane production has increased rapidly, and it was large enough to keep sugar price increases small except for 2005 and early 2006. The paper concluded that biofuel

Biofuel

s produced from grains have raised food prices in combination with other related factors between 70 to 75 percent, but ethanol produced from sugar cane has not contributed significantly to the recent increase in food commodities prices.

An economic assessment report published by the OECD in July 2008 found that "...the impact of current biofuel policies on world crop prices, largely through increased demand for cereals and vegetable oils, is significant but should not be overestimated. Current biofuel support measures alone are estimated to increase average wheat prices by about 5 percent, maize by around 7 percent and vegetable oil by about 19 percent over the next 10 years."

Corn

Maize

is used to make ethanol

Ethanol fuel

Ethanol fuel is ethanol , the same type of alcohol found in alcoholic beverages. It is most often used as a motor fuel, mainly as a biofuel additive for gasoline. World ethanol production for transport fuel tripled between 2000 and 2007 from 17 billion to more than 52 billion litres...

and prices went up by a factor of three in less than 3 years (measured in US dollars). Reports in 2007 linked stories as diverse as food riots in Mexico due to rising prices of corn for tortillas, and reduced profits at Heineken the large international brewer, to the increasing use of corn (maize) grown in the US Midwest for ethanol production. (In the case of beer, the barley area was cut in order to increase corn production. Barley is not currently used to produce ethanol.) Wheat is up by almost a factor of 3 in 3 years, while soybeans are up by a factor of 2 in 2 years (both measured in US dollars).

As corn is commonly used as feed for livestock

Livestock

Livestock refers to one or more domesticated animals raised in an agricultural setting to produce commodities such as food, fiber and labor. The term "livestock" as used in this article does not include poultry or farmed fish; however the inclusion of these, especially poultry, within the meaning...

, higher corn prices lead to higher prices in animal source foods

Animal source foods

Animal source foods include any food item that comes from an animal source such as meat, milk, fish, eggs, cheese and yogurt. Many individuals do not consume ASF or consume little ASF by either personal choice or necessity as ASF may not be accessible or available to these people.- Nutrition of...

. Vegetable oil is used to make biodiesel

Biodiesel

Biodiesel refers to a vegetable oil- or animal fat-based diesel fuel consisting of long-chain alkyl esters. Biodiesel is typically made by chemically reacting lipids with an alcohol....

and has about doubled in price in the last couple years. The price is roughly tracking crude oil

Petroleum

Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...

prices. The 2007–2008 world food price crisis

2007–2008 world food price crisis

is blamed partly on the increased demand for biofuels. During the same period rice prices went up by a factor of 3 even though rice is not directly used in biofuels.

The USDA expects the 2008/2009 wheat season to be a record crop and 8% higher than the previous year. They also expect rice to have a record crop. Wheat prices have dropped from a high over $12/bushel in May 2008 to under $8/bushel in May. Rice has also dropped from its highs.

According to a 2008 report from the World Bank the production of biofuel pushed food prices up. These conclusions were supported by the Union of Concerned Scientists

Union of Concerned Scientists

The Union of Concerned Scientists is a nonprofit science advocacy group based in the United States. The UCS membership includes many private citizens in addition to professional scientists. James J...

in their September 2008 newsletter in which they remarked that the World Bank analysis "contradicts U.S. Secretary of Agriculture Ed Schaffer's assertion that biofuels account for only a small percentage of rising food prices."

According to the October Consumer Price Index released Nov. 19, 2008, food prices continued to rise in October 2008 and were 6.3 percent higher than October 2007. Since July 2008 fuel costs dropped by nearly 60 percent.

Ethanol fuel as an oxygenate additive

The demand for ethanol fuel produced from field corn

Field corn

Field corn is maize of varieties that are not, in the United States, grown primarily for consumption as human food in the form of fresh kernels. More than 98% of corn-growing land in the U.S...

was spurred in the U.S. by the discovery that methyl tertiary butyl ether (MTBE)

Methyl tert-butyl ether

Methyl tert-butyl ether, also known as methyl tertiary butyl ether and MTBE, is an organic compound with molecular formula 3COCH3. MTBE is a volatile, flammable, and colorless liquid that is immiscible with water. It has a minty odor vaguely reminiscent of diethyl ether, leading to unpleasant taste...

was contaminating groundwater. MTBE use as a oxygenate

Oxygenate

Oxygenated chemical compounds contain oxygen as a part of their chemical structure. The term usually refers to oxygenated fuels. Oxygenates are usually employed as gasoline additives to reduce carbon monoxide that is created during the burning of the fuel....

additive was widespread due to mandates of the Clean Air Act amendments of 1992 to reduce carbon monoxide

Carbon monoxide

Carbon monoxide , also called carbonous oxide, is a colorless, odorless, and tasteless gas that is slightly lighter than air. It is highly toxic to humans and animals in higher quantities, although it is also produced in normal animal metabolism in low quantities, and is thought to have some normal...

emissions. As a result, by 2006 MTBE use in gasoline was banned in almost 20 states. There was also concern that widespread and costly litigation might be taken against the U.S. gasoline suppliers, and a 2005 decision refusing legal protection for MTBE, opened a new market for ethanol fuel, the primary substitute for MTBE. At a time when corn prices were around US$ 2 a bushel

Bushel

A bushel is an imperial and U.S. customary unit of dry volume, equivalent in each of these systems to 4 pecks or 8 gallons. It is used for volumes of dry commodities , most often in agriculture...

, corn growers recognized the potential of this new market and delivered accordingly. This demand shift took place at a time when oil prices were already significantly rising.

Other factors

That food prices went up at the same time fuel prices went up is not surprising and should not be entirely blamed on biofuels. Energy costs are a significant cost for fertilizer

Fertilizer

Fertilizer is any organic or inorganic material of natural or synthetic origin that is added to a soil to supply one or more plant nutrients essential to the growth of plants. A recent assessment found that about 40 to 60% of crop yields are attributable to commercial fertilizer use...

, farming, and food distribution

Food distribution

Food distribution, a method of distributing or transporting food or drink from one place to another, is a very important factor in public nutrition. Where it breaks down, famine, malnutrition or illness can occur...

. Also, China

China

Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...

and other countries have had significant increases in their imports as their economies have grown. Sugar is one of the main feedstocks for ethanol and prices are down from 2 years ago. Part of the food price increase for international food commodities measured in US dollars is due to the dollar being devalued. Protectionism is also an important contributor to price increases. 36% of world grain goes as fodder to feed animals, rather than people.

Over long time periods population growth

Population growth

Population growth is the change in a population over time, and can be quantified as the change in the number of individuals of any species in a population using "per unit time" for measurement....

and climate change

Climate change

Climate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...

could cause food prices to go up. However, these factors have been around for many years and food prices have jumped up in the last 3 years, so their contribution to the current problem is minimal.

Government regulations of food and fuel markets

France, Germany, the United Kingdom and the United States governments have supported biofuels with tax breaks, mandated use, and subsidies. These policies have the unintended consequence

Unintended consequence

In the social sciences, unintended consequences are outcomes that are not the outcomes intended by a purposeful action. The concept has long existed but was named and popularised in the 20th century by American sociologist Robert K. Merton...

of diverting resources from food production and leading to surging food prices and the potential destruction of natural habitats.

Fuel for agricultural use often does not have fuel tax

Fuel tax

A fuel tax is an excise tax imposed on the sale of fuel. In most countries the fuel tax is imposed on fuels which are intended for transportation...

es (farmers get duty-free petrol or diesel fuel). Biofuels may have subsidies and low/no retail fuel taxes. Biofuels compete with retail gasoline and diesel prices which have substantial taxes included. The net result is that it is possible for a farmer to use more than a gallon of fuel to make a gallon of biofuel and still make a profit. Some argue that this is a bad distortion of the market. There have been thousands of scholarly papers analyzing how much energy goes into making ethanol from corn and how that compares to the energy in the ethanol.

A World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

policy research working paper concluded that food prices have risen by 35 to 40 percent between 2002–2008, of which 70 to 75 percent is attributable to biofuel

Biofuel

s. The "month-by-month" five year analysis disputes that increases in global grain consumption and droughts were responsible for significant price increases, reporting that this had had only a marginal impact. Instead the report argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices, as increased production of biofuels in the US and EU were supported by subsidies and tariffs on imports, and considers that without these policies, price increases would have been smaller. This research also concluded that Brazil

Brazil

's sugar cane based ethanol has not raised sugar prices significantly, and recommends removing tariffs on ethanol imports by both the US and EU, to allow more efficient producers such as Brazil and other developing countries, including many African countries, to produce ethanol profitably for export to meet the mandates in the EU and the US.

An economic assessment published by the OECD in July 2008 agrees with the World Bank report recommendations regarding the negative effects of subsidies and import tariffs, but found that the estimated impact of biofuels on food prices are much smaller. The OECD study found that trade restrictions, mainly through import tariffs, protect the domestic industry from foreign competitors but impose a cost burden on domestic biofuel users and limits alternative suppliers. The report is also critical of limited reduction of GHG

Greenhouse gas

emissions achieved from biofuels based on feedstocks used in Europe and North America, finding that the current biofuel support policies would reduce greenhouse gas emissions from transport fuel by no more than 0.8% by 2015, while Brazilian ethanol from sugar cane reduces greenhouse gas emissions by at least 80% compared to fossil fuels. The assessment calls for the need for more open markets in biofuels and feedstocks in order to improve efficiency and lower costs.

Oil price increases

Oil price increases since 2003 resulted in increased demand for biofuels. Transforming vegetable oil into biodiesel

Biodiesel

Biodiesel refers to a vegetable oil- or animal fat-based diesel fuel consisting of long-chain alkyl esters. Biodiesel is typically made by chemically reacting lipids with an alcohol....

is not very hard or costly so there is a profitable arbitrage

Arbitrage

In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices...

situation if vegetable oil is much cheaper than diesel. Diesel is also made from crude oil, so vegetable oil prices are partially linked to crude oil prices. Farmers can switch to growing vegetable oil crops if those are more profitable than food crops. So all food prices are linked to vegetable oil prices, and in turn to crude oil prices. A World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

study concluded that oil prices and a weak dollar explain 25-30% of total price rise between January 2002 until June 2008.

Demand for oil is outstripping the supply of oil and oil depletion

Oil depletion

Oil depletion occurs in the second half of the production curve of an oil well, oil field, or the average of total world oil production. The Hubbert peak theory makes predictions of production rates based on prior discovery rates and anticipated production rates. Hubbert curves predict that the...

is expected to cause crude oil prices to go up over the next 50 years. Record oil prices are inflating food prices worldwide, including those crops that have no relation to biofuels, such as rice and fish.

In Germany and Canada it is now much cheaper to heat a house by burning grain than by using fuel derived from crude oil.
With oil at $120/barrel a savings of a factor of 3 on heating costs is possible. When crude oil was at $25/barrel there was no economic incentive to switch to a grain fed heater.

From 1971 to 1973, around the time of the 1973 oil crisis

1973 oil crisis

The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...

, corn and wheat prices went up by a factor of 3. There was no significant biofuel usage at that time.

US government policy

Some argue that the US government policy of encouraging ethanol

Ethanol fuel in the United States

The United States became the world's largest producer of ethanol fuel in 2005. The U.S. produced 13.2 billion U.S. liquid gallons of ethanol fuel in 2010, and together with Brazil, accounted for 88% of that year's global production...

from corn is the main cause for food price increases. US Federal government ethanol subsidies total $7 billion per year, or $1.90 per gallon. Ethanol provides only 55% as much energy as gasoline per gallon, realizing about a $3.45 per gallon gasoline trade off. Corn is used to feed chickens, cows, and pigs, so higher corn prices lead to higher prices for chicken, beef, pork, milk, cheese, etc.

U.S. Senators introduced the BioFuels Security Act
BioFuels Security Act
The BioFuels Security Act is a proposed legislative Act of Congress intended to phase out current single-fueled vehicles in favor of flexible-fuel vehicles...

in 2006. "It's time for Congress

United States Congress

The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....

to realize what farmers in America's heartland have known all along - that we have the capacity and ingenuity to decrease our dependence on foreign oil by growing our own fuel," said U.S. Senator for Illinois Barack Obama

Barack Obama

Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...

.

Two-thirds of U.S. oil consumption is due to the transport

Transport

Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...

ation sector. The Energy Independence and Security Act of 2007

Energy Independence and Security Act of 2007

The Energy Independence and Security Act of 2007 is an Act of Congress concerning the energy policy of the United States...

has a significant impact on U.S. Energy Policy

Energy policy of the United States

The energy policy of the United States is determined by federal, state and local public entities in the United States, which address issues of energy production, distribution, and consumption, such as building codes and gas mileage standards...

. With the high profitability of growing corn, more and more farmers switch to growing corn until the profitability of other crops goes up to match that of corn. So the ethanol/corn subsidies drive up the prices of other farm crops.

The US - an important export country for food stocks - will convert 18% of its grain output to ethanol in 2008. Across the US, 25% of the whole corn crop went to ethanol in 2007. The percentage of corn going to biofuel is expected to go up.

Since 2004 a US subsidy has been paid to companies that blend biofuel and regular fuel.
The European biofuel subsidy is paid at the point of sale.
Companies import biofuel to the US, blend 1% or even 0.1% regular fuel, and then ship the blended fuel to Europe, where it can get a second subsidy. These blends are called B99 or B99.9 fuel. The practice is called "splash and dash". The imported fuel may even come from Europe to the US, get 0.1% regular fuel, and then go back to Europe. For B99.9 fuel the US blender gets a subsidy of $0.999 per gallon. The European biodiesel producers have urged the EU to impose punitive duties on these subsidized imports. US lawmakers are also looking at closing this loophole.

Freeze on first generation biofuel production

Environmental campaigner George Monbiot

George Monbiot

George Joshua Richard Monbiot is an English writer, known for his environmental and political activism. He lives in Machynlleth, Wales, writes a weekly column for The Guardian, and is the author of a number of books, including Captive State: The Corporate Takeover of Britain and Bring on the...

has argued for a 5-year freeze on biofuels while their impact on poor communities and the environment is assessed. It has been suggested that a problem with Monbiot's approach is that economic drivers may be required in order to push through the development of more sustainable second-generation biofuel processes: it is possible that these could be stalled if biofuel production decreases. Some environmentalists are suspicious that second-generation biofuels may not solve the problem of a potential clash with food as they also use significant agricultural resources such as water.

A recent UN

United Nations

The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...

report on biofuel also raises issues regarding food security and biofuel production. Jean Ziegler

Jean Ziegler

Jean Ziegler is a former professor of sociology at the University of Geneva and the Sorbonne, Paris. He was a Member of Parliament for the Social Democrats in the Federal Assembly of Switzerland from 1981 to 1999...

, then UN Special Rapporteur on food, concluded that while the argument for biofuels in terms of energy efficiency and climate change are legitimate, the effects for the world's hungry of transforming wheat and maize crops into biofuel are "absolutely catastrophic," and terms such use of arable land a "crime against humanity." Ziegler also calls for a 5-year moratorium on biofuel production. Ziegler's proposal for a five-year ban was rejected by the U.N. Secretary Ban Ki-moon

Ban Ki-moon

Ban Ki-moon is the eighth and current Secretary-General of the United Nations, after succeeding Kofi Annan in 2007. Before going on to be Secretary-General, Ban was a career diplomat in South Korea's Ministry of Foreign Affairs and in the United Nations. He entered diplomatic service the year he...

, who called for a comprehensive review of the policies on biofuels, and said that "just criticising biofuel may not be a good solution".

Food surpluses exist in many developed countries. For example, the UK wheat surplus was around 2 million tonnes in 2005. This surplus alone could produce sufficient bioethanol to replace around 2.5% of the UK's petroleum consumption, without requiring any increase in wheat cultivation or reduction in food supply or exports. However, above a few percent, there would be direct competition between first generation biofuel production and food production. This is one reason why many view second generation biofuels

Second generation biofuels

as increasingly important.

Non-food crops for biofuel

There are different types of biofuels and different feedstocks for them, and it has been proposed that only non-food crops be used for biofuel. This avoids direct competition for commodities like corn

Maize

and edible vegetable oil. However, as long as farmers can make more money by switching to biofuels they will.
The law of supply and demand predicts that if fewer farmers are producing food the price of food will rise.

Second generation biofuels

Second generation biofuels

use lignocellulosic raw material such as forest residues (sometimes referred to as brown waste

Brown waste

Brown Waste is any biodegradable waste that is predominantly carbon based. The term includes such items as dry leaves, twigs, hay, paper, sawdust, corn cobs, cardboard, pine needles or cones, etc....

and black liquor

Black liquor

Black liquor is the spent cooking liquor from the kraft process when digesting pulpwood into paper pulp removing lignin, hemicelluloses and other extractives from the wood to free the cellulose fibers....

from Kraft process

Kraft process

The kraft process describes a technology for conversion of wood into wood pulp consisting of almost pure cellulose fibers...

or sulfite process

Sulfite process

The sulfite process produces wood pulp which is almost pure cellulose fibers by using various salts of sulfurous acid to extract the lignin from wood chips in large pressure vessels called digesters. The salts used in the pulping process are either sulfites , or bisulfites , depending on the pH...

pulp mill

Pulp mill

A pulp mill is a manufacturing facility that converts wood chips or other plant fibre source into a thick fibre board which can be shipped to a paper mill for further processing. Pulp can be manufactured using mechanical, semi-chemical or fully chemical methods...

s). Third generation biofuels (biofuel from algae) use non-edible raw materials sources that can be used for biodiesel and bioethanol.

Biodiesel

Soybean oil, which only represents half of the domestic raw materials available for biodiesel production in the United States, is one of many raw materials that can be used to produce biodiesel.

Non-food crops like Camelina

Camelina

Camelina is a genus within the flowering plant family Brassicaceae. One species, Camelina sativa, is a historic and potentially important oil plant. It is native to Mediterranean regions of the world like, Europe and Asia.Turkamanistan, Afghanistan, Pakistan, Iran and Spain...

, Jatropha

Jatropha

Jatropha is a genus of approximately 175 succulent plants, shrubs and trees , from the family Euphorbiaceae. The name is derived from the Greek words ἰατρός , meaning "physician," and τροφή , meaning "nutrition," hence the common name physic nut. Mature plants produce separate male and female...

, seashore mallow

Seashore mallow

Seashore mallow also known as Sweat weed or Virginia saltmarsh mallow, and Salt Marsh Mallow is an herb found in marshes along the eastern seashore of the United States. This flowering plant is in family Malvaceae of the order Malvales...

and mustard

Mustard plant

Mustards are several plant species in the genera Brassica and Sinapis whose small mustard seeds are used as a spice and, by grinding and mixing them with water, vinegar or other liquids, are turned into the condiment known as mustard or prepared mustard...

, used for biodiesel, can thrive on marginal agricultural land where many trees and crops won't grow, or would produce only slow growth yields. Camelina is virtually 100 percent efficient. It can be harvested and crushed for oil and the remaining parts can be used to produce high quality omega-3 rich animal feed, fiberboard, and glycerin. Camelina does not take away from land currently being utilized for food production. Most camelina acres are grown in areas that were previously not utilized for farming. For example, areas that receive limited rainfall that can not sustain corn or soybeans without the addition of irrigation can grow camelina and add to their profitability.

Jatropha

Jatropha

cultivation provides benefits for local communities:

Cultivation and fruit picking by hand is labour-intensive and needs around one person per hectare. In parts of rural India and Africa this provides much-needed jobs - about 200,000 people worldwide now find employment through jatropha. Moreover, villagers often find that they can grow other crops in the shade of the trees. Their communities will avoid importing expensive diesel and there will be some for export too.

NBB

National Biodiesel Board

The National Biodiesel Board is a commercial trade association representing the biodiesel industry as the unifying and coordinating body for research and development in the United States. Its mission is to advance the interests of members by creating sustainable biodiesel industry growth. NBB...

’s Feedstock Development program is addressing production of arid

Arid

A region is said to be arid when it is characterized by a severe lack of available water, to the extent of hindering or even preventing the growth and development of plant and animal life...

variety crops, algae, waste greases, and other feedstocks on the horizon to expand available material for biodiesel in a sustainable manner.

Bioalcohols

Cellulosic ethanol

Cellulosic ethanol is a biofuel produced from wood, grasses, or the non-edible parts of plants.It is a type of biofuel produced from lignocellulose, a structural material that comprises much of the mass of plants. Lignocellulose is composed mainly of cellulose, hemicellulose and lignin...

is a type of biofuel produced from lignocellulose, a material that comprises much of the mass of plants. Corn stover

Corn stover

Corn stover consists of the leaves and stalks of maize plants left in a field after harvest and consists of the residue: stalk; the leaf, husk, and cob remaining in the field following the harvest of cereal grain.” Stover makes up about half of the yield of a crop and is similar to straw...

, switchgrass

Switchgrass

Panicum virgatum, commonly known as switchgrass, is a perennial warm season bunchgrass native to North America, where it occurs naturally from 55°N latitude in Canada southwards into the United States and Mexico...

, miscanthus

Miscanthus

Miscanthus is a genus of about 15 species of perennial grasses native to subtropical and tropical regions of Africa and southern Asia, with one species Miscanthus is a genus of about 15 species of perennial grasses native to subtropical and tropical regions of Africa and southern Asia, with one...

and woodchip

Wood pulp

Pulp is a lignocellulosic fibrous material prepared by chemically or mechanically separating cellulose fibres from wood, fibre crops or waste paper. Wood pulp is the most common raw material in papermaking.-History:...

are some of the more popular non-edible cellulosic materials for ethanol production. Commercial investment in such second-generation biofuels

Cellulosic ethanol commercialization

Cellulosic ethanol commercialization is the process of building an industry out of methods of turning cellulose-containing organic matter into fuel...

began in 2006/2007, and much of this investment went beyond pilot-scale plants. Cellulosic ethanol commercialization

Cellulosic ethanol commercialization

Cellulosic ethanol commercialization is the process of building an industry out of methods of turning cellulose-containing organic matter into fuel...

is moving forward rapidly. The world’s first commercial wood-to-ethanol plant began operation in Japan in 2007, with a capacity of 1.4 million liters/year. The first wood-to-ethanol plant in the United States is planned for 2008 with an initial output of 75 million liters/year.

Other second generation biofuels

Second generation biofuels

may be commercialized in the future and compete less with food. Synthetic fuel

Synthetic fuel

Synthetic fuel or synfuel is a liquid fuel obtained from coal, natural gas, oil shale, or biomass. It may also refer to fuels derived from other solids such as plastics or rubber waste. It may also refer to gaseous fuels produced in a similar way...

can be made from coal

Coal

Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...

or biomass

Biomass

Biomass, as a renewable energy source, is biological material from living, or recently living organisms. As an energy source, biomass can either be used directly, or converted into other energy products such as biofuel....

and may be commercialized soon.

Biofuel from food byproducts and coproducts

Biofuels can also be produced from the waste

Waste

Waste is unwanted or useless materials. In biology, waste is any of the many unwanted substances or toxins that are expelled from living organisms, metabolic waste; such as urea, sweat or feces. Litter is waste which has been disposed of improperly...

byproducts of food-based agriculture (such as citrus

Citrus

Citrus is a common term and genus of flowering plants in the rue family, Rutaceae. Citrus is believed to have originated in the part of Southeast Asia bordered by Northeastern India, Myanmar and the Yunnan province of China...

peel

Peel (fruit)

Peel, also known as rind or skin, is the outer protective layer of a fruit or vegetable which could be peeled off. The rind is usually the botanical exocarp, but the term exocarp does also include the hard cases of nuts, which are not named peels since they are not peeled off by hand or peeler, but...

s or used vegetable oil) to manufacture an environmentally sustainable fuel supply, and reduce waste disposal cost.

A growing percentage of U.S. biodiesel production is made from waste vegetable oil (recycled restaurant oils) and greases.

Collocation

Collocation

In corpus linguistics, collocation defines a sequence of words or terms that co-occur more often than would be expected by chance. In phraseology, collocation is a sub-type of phraseme. An example of a phraseological collocation is the expression strong tea...

of a waste generator with a waste-to-ethanol plant can reduce the waste producer's operating cost, while creating a more-profitable ethanol production business. This innovative collocation concept is sometimes called holistic systems engineering

Systems engineering

Systems engineering is an interdisciplinary field of engineering that focuses on how complex engineering projects should be designed and managed over the life cycle of the project. Issues such as logistics, the coordination of different teams, and automatic control of machinery become more...

. Collocation disposal elimination may be one of the few cost-effective, environmentally-sound, biofuel strategies, but its scalability

Scalability

In electronics scalability is the ability of a system, network, or process, to handle growing amount of work in a graceful manner or its ability to be enlarged to accommodate that growth...

is limited by availability of appropriate waste generation sources. For example, millions of tons of wet Florida-and-California citrus peels cannot supply billions of gallons of biofuels. Due to the higher cost of transporting ethanol, it is a local partial solution, at best.

More firms are investigating the potential of fractionating technology to remove corn

Maize

germ

Cereal germ

The germ of a cereal is the reproductive part that germinates to grow into a plant; it is the embryo of the seed. Along with bran, germ is often a by-product of the milling that produces refined grain products. Cereal grains and their components, such as wheat germ, rice bran, and maize may be used...

(i.e. the portion of the corn kernel that contains oil) prior to the ethanol process. Furthermore, some ethanol plants have already announced their intention to employ technology to remove the remaining vegetable oil from dried distillers grains, a coproduct

Coproduct

In category theory, the coproduct, or categorical sum, is the category-theoretic construction which includes the disjoint union of sets and of topological spaces, the free product of groups, and the direct sum of modules and vector spaces. The coproduct of a family of objects is essentially the...

of the ethanol process. Both of these technologies would add to the biodiesel

Biodiesel

Biodiesel refers to a vegetable oil- or animal fat-based diesel fuel consisting of long-chain alkyl esters. Biodiesel is typically made by chemically reacting lipids with an alcohol....

raw material supply.

Biofuel subsidies and tariffs

Some people have claimed that ending subsidies and tariffs would enable sustainable development

Sustainable development

Sustainable development is a pattern of resource use, that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come...

of a global biofuels market. Taxing biofuel imports while letting petroleum in duty-free does not fit with the goal of encouraging biofuels. Ending mandates, subsidies, and tariffs would end the distortions that current policy is causing. Some US senators advocate reducing subsidies for corn based ethanol. The US ethanol tariff and some US ethanol subsidies are currently set to expire over the next couple years. The EU is rethinking their biofuels directive due to environmental and social concerns. On January 18, 2008 the UK House of Commons Environmental Audit Committee raised similar concerns, and called for a moratorium on biofuel targets. Germany ended their subsidy of biodiesel on Jan 1 2008 and started taxing it.

Reduce farmland reserves and set asides

To avoid overproduction and to prop up farmgate prices for agricultural commodities, some countries have farm subsidy programs to encourage farmers not to produce and leave productive acres fallow. The 2008 crisis prompted proposals to bring some of the reserve farmland back into use.

The American Bakers Association has proposed reducing the amount of farmland held in the US Conservation Reserve Program

Conservation Reserve Program

The Conservation Reserve Program is a cost-share and rental payment program under the United States Department of Agriculture , and is administered by the USDA Farm Service Agency . Technical assistance for CRP is provided by the USDA Forest Service and the USDA Natural Resources Conservation...

.
Currently the US has 34500000 acres (139,616.7 km²) in the program.

In Europe about 8% of the farmland is in set aside programs. Farmers have proposed freeing up all of this for farming. Two-thirds of the farmers who were on these programs in the UK are not renewing when their term expires.

Sustainable production of biofuels

Second generation biofuels are now being produced from the cellulose in dedicated energy crops (such as perennial grasses), forestry materials, the co-products from food production, and domestic vegetable waste. Advances in the conversion processes will almost certainly improve the sustainability of biofuels, through better efficiencies and reduced environmental impact of producing biofuels, from both existing food crops and from cellulosic sources.

Lord Ron Oxburgh suggests that responsible production of biofuels has several advantages:

Produced responsibly they are a sustainable energy source that need not divert any land from growing food nor damage the environment; they can also help solve the problems of the waste generated by Western society; and they can create jobs for the poor where previously were none. Produced irresponsibly, they at best offer no climate benefit and, at worst, have detrimental social and environmental consequences. In other words, biofuels are pretty much like any other product.

Far from creating food shortages, responsible production and distribution of biofuels represents the best opportunity for sustainable economic prospects in Africa, Latin America and impoverished Asia. Biofuels offer the prospect of real market competition and oil price moderation. Crude oil would be trading 15 per cent higher and gasoline would be as much as 25 per cent more expensive, if it were not for biofuels. A healthy supply of alternative energy sources will help to combat gasoline price spikes.

Continuation of the status quo

An additional policy option is to continue the current trends of government incentive for these types of crops to further evaluate the effects on food prices over a longer period of time due to the relatively recent onset of the biofuel production industry. Additionally, by virtue of the newness of the industry we can assume that like other startup industries techniques and alternatives will be cultivated quickly if there is sufficient demand for the alternative fuels and biofuels. What could result from the shock to food prices is a very quick move toward some of the non-food biofuels as are listed above amongst the other policy alternatives.

Impact on developing countries

Demand for fuel in rich countries is now competing against demand for food in poor countries. The increase in world grain consumption in 2006 happened due to the increase in consumption for fuel, not human consumption. The grain required to fill a 25 gallons (94.6 l) fuel tank with ethanol will feed one person for a year.

Several factors combine to make recent grain and oilseed price increases impact poor countries more:

Poor people buy more grains (e.g. wheat), and are more exposed to grain price changes.
Poor people spend a higher portion of their income on food, so increasing food prices influence them more.
Aid organizations which buy food and send it to poor countries see more need when prices go up but are able to buy less food on the same budget.

The impact is not all negative. The Food and Agriculture Organization

Food and Agriculture Organization

The Food and Agriculture Organization of the United Nations is a specialised agency of the United Nations that leads international efforts to defeat hunger. Serving both developed and developing countries, FAO acts as a neutral forum where all nations meet as equals to negotiate agreements and...

(FAO) recognizes the potential opportunities that the growing biofuel market offers to small farmers and aquaculturers around the world and has recommended small-scale financing to help farmers in poor countries produce local biofuel.

On the other hand, poor countries that do substantial farming have increased profits due to biofuels. If vegetable oil prices double, the profit margin could more than double. In the past rich countries have been dumping

Dumping (pricing policy)

In economics, "dumping" is any kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price either below the price charged in its home market, or in quantities that cannot be explained through normal market...

subsidized grains at below cost prices into poor countries and hurting the local farming industries. With biofuels using grains the rich countries no longer have grain surpluses to get rid of. Farming in poor countries is seeing healthier profit margins and expanding.

Interviews with local peasants in southern Ecuador provide strong anecdotal evidence that the high price of corn is encouraging the burning of tropical forests. The destruction of tropical forests now account for 20% of all greenhouse gas emmisons.

National Corn Growers Association

US government subsidies for making ethanol from corn have been attacked as the main cause of the food vs fuel problem. To defend themselves, the US corn growers association has published their views on this issue. They consider the "food vs fuel" argument to be a fallacy that is "fraught with misguided logic, hyperbole and scare tactics."

Claims made by the NCGA include:

Corn growers have been and will continue to produce enough corn so that supply and demand
Supply and demand
Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers , resulting in an...

meet and there is no shortage. Farmers make their planting decisions based on signals from the marketplace. If demand for corn is high and projected revenue-per-acre is strong relative to other crops, farmers will plant more corn. In 2007 US farmers planted 92900000 acres (375,953.3 km²) with corn, 19% more acres than they did in 2006.

The U.S. has doubled corn yields over the last 40 years and expects to double them again in the next 20 years. With twice as much corn from each acre, corn can be put to new uses without taking food from the hungry or causing deforestation.

US consumers buy things like corn flakes
Corn flakes
Corn flakes are a popular breakfast cereal originally manufactured by Kellogg's through the treatment of maize. A patent for the product was filed on May 31, 1895, and issued on April 14, 1896.-History:...

where the cost of the corn per box is around 5 cents. Most of the cost is packaging, advertising, shipping, etc. Only about 19% of the US retail food prices can be attributed to the actual cost of food inputs like grains and oilseeds. So if the price of a bushel of corn goes up, there may be no noticeable impact on US retail food prices. The US retail food price index has gone up only a few percent per year and is expected to continue to have very small increases.

Most of the corn produced in the US is field corn
Field corn
Field corn is maize of varieties that are not, in the United States, grown primarily for consumption as human food in the form of fresh kernels. More than 98% of corn-growing land in the U.S...

, not sweet corn, and not digestible by humans in its raw form. Most corn is used for livestock feed and not human food, even the portion that is exported.

Only the starch portion of corn kernels is converted to ethanol. The rest (protein, fat, vitamins and minerals) is passed through to the feed coproducts or human food ingredients.

One of the most significant and immediate benefits of higher grain prices is a dramatic reduction in federal farm support payments. According to the U.S. Department of Agriculture, corn farmers received $8.8 billion in government support in 2006. Because of higher corn prices, payments are expected to drop to $2.1 billion in 2007, a 76 percent reduction.

While the EROEI
EROEI
In physics, energy economics and ecological energetics, energy returned on energy invested ; or energy return on investment , is the ratio of the amount of usable energy acquired from a particular energy resource to the amount of energy expended to obtain that energy resource...

and economics of corn based ethanol are a bit weak, it paves the way for cellulosic ethanol
Cellulosic ethanol
Cellulosic ethanol is a biofuel produced from wood, grasses, or the non-edible parts of plants.It is a type of biofuel produced from lignocellulose, a structural material that comprises much of the mass of plants. Lignocellulose is composed mainly of cellulose, hemicellulose and lignin...

which should have much better EROEI and economics.

While basic nourishment is clearly important, fundamental societal needs of energy
Energy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...

, mobility, and energy security
Energy security
Energy security is a term for an association between national security and the availability of natural resources for energy consumption. Access to cheap energy has become essential to the functioning of modern economies. However, the uneven distribution of energy supplies among countries has led...

are too. If farmers crops can help their country in these areas also, it seems right to do so.

Since reaching record high prices in June 2008, corn prices fell 50% by October 2008, declining sharply together with other commodities, including oil. As ethanol production from corn has continue at the same levels, some have argued that this trend shows the belief that the increased demand for corn to produce ethanol was mistaken. "Analysts, including some in the ethanol sector, say ethanol demand adds about 75 cents to $1.00 per bushel to the price of corn, as a rule of thumb. Other analysts say it adds around 20 percent, or just under 80 cents per bushel at current prices. Those estimates hint that $4 per bushel corn might be priced at only $3 without demand for ethanol fuel.". These industry sources consider that a speculative bubble in the commodity markets

Commodity markets

Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts....

holding positions in corn futures

Futures contract

In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...

was the main driver behind the observed hike in corn prices affecting food supply.

Controversy within the international system

The United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

and Brazil

Brazil

lead the industrial world in global ethanol production, with Brazil as the world's largest exporter and biofuel

Biofuel

industry leader. In 2006 the U.S. produced 18.4 billion liters (4.86 billion gallon

Gallon

The gallon is a measure of volume. Historically it has had many different definitions, but there are three definitions in current use: the imperial gallon which is used in the United Kingdom and semi-officially within Canada, the United States liquid gallon and the lesser used United States dry...

s), closely followed by Brazil with 16.3 billion liters (4.3 billion gallons), producing together 70% of the world's ethanol market and nearly 90% of ethanol used as fuel. These countries are followed by China

China

with 7.5%, and India

India

India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

with 3.7% of the global market share.

Since 2007, the concerns, criticisms and controversy surrounding the food vs biofuels issue has reached the international system

International relations

International relations is the study of relationships between countries, including the roles of states, inter-governmental organizations , international nongovernmental organizations , non-governmental organizations and multinational corporations...

, mainly heads of states

Head of State

A head of state is the individual that serves as the chief public representative of a monarchy, republic, federation, commonwealth or other kind of state. His or her role generally includes legitimizing the state and exercising the political powers, functions, and duties granted to the head of...

, and inter-governmental organizations

International organization

An intergovernmental organization, sometimes rendered as an international governmental organization and both abbreviated as IGO, is an organization composed primarily of sovereign states , or of other intergovernmental organizations...

(IGOs), such as the United Nations

United Nations

and several of its agencies, particularly the Food and Agriculture Organization

Food and Agriculture Organization

(FAO) and the World Food Programme

World Food Programme

The World Food Programme is the food aid branch of the United Nations, and the world's largest humanitarian organization addressing hunger worldwide. WFP provides food, on average, to 90 million people per year, 58 million of whom are children...

(WFP); the International Monetary Fund

International Monetary Fund

The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

; the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

; and agencies within the European Union

European Union

The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

The 2007 controversy: Ethanol diplomacy in the Americas

In March 2007, "ethanol diplomacy" was the focus of President George W. Bush

George W. Bush

George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....

's Latin American tour, in which he and Brazil's president, Luiz Inácio Lula da Silva

Luiz Inácio Lula da Silva

Luiz Inácio Lula da Silva , known popularly as Lula, served as the 35th President of Brazil from 2003 to 2010.A founding member of the Workers' Party , he ran for President three times unsuccessfully, first in the 1989 election. Lula achieved victory in the 2002 election, and was inaugurated as...

, were seeking to promote the production and use of sugar cane based ethanol throughout Latin America

Latin America

Latin America is a region of the Americas where Romance languages – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...

and the Caribbean

Caribbean

The Caribbean is a crescent-shaped group of islands more than 2,000 miles long separating the Gulf of Mexico and the Caribbean Sea, to the west and south, from the Atlantic Ocean, to the east and north...

. The two countries also agreed to share technology and set international standards for biofuels. The Brazilian sugar cane technology transfer will permit various Central American countries, such as Honduras

Honduras

Honduras is a republic in Central America. It was previously known as Spanish Honduras to differentiate it from British Honduras, which became the modern-day state of Belize...

, Nicaragua

Nicaragua

Nicaragua is the largest country in the Central American American isthmus, bordered by Honduras to the north and Costa Rica to the south. The country is situated between 11 and 14 degrees north of the Equator in the Northern Hemisphere, which places it entirely within the tropics. The Pacific Ocean...

, Costa Rica

Costa Rica

Costa Rica , officially the Republic of Costa Rica is a multilingual, multiethnic and multicultural country in Central America, bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west and the Caribbean Sea to the east....

and Panama

Panama

Panama , officially the Republic of Panama , is the southernmost country of Central America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The...

, several Caribbean

Caribbean

countries, and various Andean Countries

Andean Community of Nations

The Andean Community is a customs union comprising the South American countries of Bolivia, Colombia, Ecuador and Peru. The trade bloc was called the Andean Pact until 1996 and came into existence with the signing of the Cartagena Agreement in 1969...

tariff-free trade with the U.S. thanks to existing concessionary trade agreements. Even though the U.S. imposes a USD 0.54 tariff on every gallon of imported ethanol, the Caribbean nations and countries in the Central American Free Trade Agreement are exempt from such duties if they produce ethanol from crops grown in their own countries. The expectation is that using Brazilian technology for refining sugar cane based ethanol, such countries could become exporters to the United States in the short-term. In August 2007, Brazil's President toured Mexico

Mexico

The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...

and several countries in Central America and the Caribbean to promote Brazilian ethanol technology.

This alliance between the U.S. and Brazil generated some negative reactions. While Bush was in São Paulo

São Paulo

São Paulo is the largest city in Brazil, the largest city in the southern hemisphere and South America, and the world's seventh largest city by population. The metropolis is anchor to the São Paulo metropolitan area, ranked as the second-most populous metropolitan area in the Americas and among...

as part of the 2007 Latin American tour, Venezuela

Venezuela

Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...

's President Hugo Chavez

Hugo Chávez

Hugo Rafael Chávez Frías is the 56th and current President of Venezuela, having held that position since 1999. He was formerly the leader of the Fifth Republic Movement political party from its foundation in 1997 until 2007, when he became the leader of the United Socialist Party of Venezuela...

, from Buenos Aires

Buenos Aires

Buenos Aires is the capital and largest city of Argentina, and the second-largest metropolitan area in South America, after São Paulo. It is located on the western shore of the estuary of the Río de la Plata, on the southeastern coast of the South American continent...

, dismissed the ethanol plan as "a crazy thing" and accused the U.S. of trying "to substitute the production of foodstuffs for animals and human beings with the production of foodstuffs for vehicles, to sustain the American way of life." Chavez' complaints were quicky followed by then Cuba

Cuba

The Republic of Cuba is an island nation in the Caribbean. The nation of Cuba consists of the main island of Cuba, the Isla de la Juventud, and several archipelagos. Havana is the largest city in Cuba and the country's capital. Santiago de Cuba is the second largest city...

n President Fidel Castro

Fidel Castro

Fidel Alejandro Castro Ruz is a Cuban revolutionary and politician, having held the position of Prime Minister of Cuba from 1959 to 1976, and then President from 1976 to 2008. He also served as the First Secretary of the Communist Party of Cuba from the party's foundation in 1961 until 2011...

, who wrote that "you will see how many people among the hungry masses of our planet will no longer consume corn." "Or even worse," he continued, "by offering financing to poor countries to produce ethanol from corn or any other kind of food, no tree will be left to defend humanity from climate change."' Daniel Ortega

Daniel Ortega

José Daniel Ortega Saavedra is a Nicaraguan politician and revolutionary, currently serving as the 83rd President of Nicaragua, a position that he has held since 2007. He previously served as the 79th President, between 1985 and 1990, and for much of his life, has been a leader in the Sandinista...

, Nicaragua

Nicaragua

's President, and one of the preferencial recipients of Brazil technical aid, said that "we reject the gibberish of those who applaud Bush's totally absurd proposal, which attacks the food security rights of Latin Americans and Africans, who are major corn consumers", however, he voiced support for sugar cane based ethanol during Lula

Luiz Inácio Lula da Silva

's visit to Nicaragua.

The 2008 controversy: Global food prices

As a result of the international community

International community

The international community is a term used in international relations to refer to all peoples, cultures and governments of the world or to a group of them. The term is used to imply the existence of common duties and obligations between them...

's concerns regarding the steep increase in food prices

2007–2008 world food price crisis

, on April 14, 2008, Jean Ziegler

Jean Ziegler

, the United Nations Special Rapporteur on the Right to Food, at the Thirtieth Regional Conference of the Food and Agriculture Organization

Food and Agriculture Organization

(FAO) in Brasília

Brasília

Brasília is the capital city of Brazil. The name is commonly spelled Brasilia in English. The city and its District are located in the Central-West region of the country, along a plateau known as Planalto Central. It has a population of about 2,557,000 as of the 2008 IBGE estimate, making it the...

, called biofuels a "crime against humanity", a claim he had previously made in October 2007, when he called for a 5-year ban for the conversion of land for the production of biofuels. The previous day, at their Annual International Monetary Fund

International Monetary Fund

and World Bank Group

World Bank Group

The World Bank Group is a family of five international organizations that makes leveraged loans, generally to poor countries.The Bank came into formal existence on 27 December 1945 following international ratification of the Bretton Woods agreements, which emerged from the United Nations Monetary...

meeting at Washington, D.C.

Washington, D.C.

Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....

, the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

's President, Robert Zoellick

Robert Zoellick

Robert Bruce Zoellick is the eleventh president of the World Bank, a position he has held since July 1, 2007. He was previously a managing director of Goldman Sachs, United States Deputy Secretary of State and U.S. Trade Representative, from February 7, 2001 until February 22, 2005.President...

, stated that "While many worry about filling their gas tanks, many others around the world are struggling to fill their stomachs. And it's getting more and more difficult every day."

Luiz Inácio Lula da Silva

Luiz Inácio Lula da Silva

gave a strong rebuttal, calling both claims "fallacies resulting from commercial interests", and putting the blame instead on U.S. and European

European Union

agricultural subsidies

Agricultural subsidy

An agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities...

, and a problem restricted to U.S. ethanol produced from maize. He also said that "biofuels aren't the villain that threatens food security." In the middle of this new wave of criticism, Hugo Chavez

Hugo Chávez

reaffirmed his opposition and said that he is concerned that "so much U.S.-produced corn could be used to make biofuel, instead of feeding the world's poor", calling the U.S. initiative to boost ethanol production during a world food crisis a "crime."

German Chancellor Angela Merkel

Angela Merkel

Angela Dorothea Merkel is the current Chancellor of Germany . Merkel, elected to the Bundestag from Mecklenburg-Vorpommern, has been the chairwoman of the Christian Democratic Union since 2000, and chairwoman of the CDU-CSU parliamentary coalition from 2002 to 2005.From 2005 to 2009 she led a...

said the rise in food prices is due to poor agricultural policies and changing eating habits in developing nations, not biofuels as some critics claim. On the other hand, British Prime Minister

Prime Minister of the United Kingdom

The Prime Minister of the United Kingdom of Great Britain and Northern Ireland is the Head of Her Majesty's Government in the United Kingdom. The Prime Minister and Cabinet are collectively accountable for their policies and actions to the Sovereign, to Parliament, to their political party and...

Gordon Brown

James Gordon Brown is a British Labour Party politician who was the Prime Minister of the United Kingdom and Leader of the Labour Party from 2007 until 2010. He previously served as Chancellor of the Exchequer in the Labour Government from 1997 to 2007...

called for international action and said Britain had to be "selective" in supporting biofuels, and depending on the U.K.

United Kingdom

The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

's assessment of biofuels' impact on world food prices, "we will also push for change in EU

European Union

biofuels targets". Stavros Dimas

Stavros Dimas

Stavros Dimas is a Greek politician who was European Commissioner for the Environment from 2004 to 2009. Since November 2011, he has served in the government of Greece as Minister for Foreign Affairs.-Early career:...

, European Commission

European Commission

The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....

er for the Environment

Natural environment

The natural environment encompasses all living and non-living things occurring naturally on Earth or some region thereof. It is an environment that encompasses the interaction of all living species....

said through a spokeswoman that "there is no question for now of suspending the target fixed for biofuels", though he acknowledged that the EU had underestimated problems caused by biofuels.

On April 29, 2008, U.S. President George W. Bush

George W. Bush

declared during a press conference that "85 percent of the world's food prices are caused by weather, increased demand and energy prices", and recognized that "15 percent has been caused by ethanol". He added that "the high price of gasoline is going to spur more investment in ethanol as an alternative to gasoline. And the truth of the matter is it's in our national interests that our farmers grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us." Regarding the effect of agricultural subsidies on rising food prices, Bush said that "Congress is considering a massive, bloated farm bill that would do little to solve the problem. The bill Congress is now considering would fail to eliminate subsidy payments to multi-millionaire farmers", he continued, "this is the right time to reform our nation's farm policies by reducing unnecessary subsidies".

Just a week before this new wave of international controversy began, U.N. Secretary General Ban Ki-moon

Ban Ki-moon

had commented that several U.N. agencies were conducting a comprehensive review of the policy on biofuels, as the world food price crisis might trigger global instability. He said "We need to be concerned about the possibility of taking land or replacing arable land because of these biofuels", then he added "While I am very much conscious and aware of these problems, at the same time you need to constantly look at having creative sources of energy, including biofuels. Therefore, at this time, just criticising biofuel may not be a good solution. I would urge we need to address these issues in a comprehensive manner." Regarding Jean Ziegler

Jean Ziegler

's proposal for a five-year ban, the U.N. Secretary rejected that proposal.

A report released by Oxfam

Oxfam

Oxfam is an international confederation of 15 organizations working in 98 countries worldwide to find lasting solutions to poverty and related injustice around the world. In all Oxfam’s actions, the ultimate goal is to enable people to exercise their rights and manage their own lives...

in June 2008 criticized biofuel policies of rich countries as neither a solution to the climate crisis nor the oil crisis, while contributing to the food price crisis. The report concluded that from all biofuels available in the market, Brazilian sugarcane ethanol is far from perfect but it is the most favorable biofuel in the world in term of cost and GHG

GHG

GHG can be an abbreviation for:* Greenhouse gas* George H. Goble, inventor of multi-CPU Unix systems, refrigerants, and winner of the 1996 Ig Nobel Prize in Chemistry.* Marshfield Municipal Airport in Marshfield, Massachusetts....

balance. The report discusses some existing problems and potential risks, and asks the Brazilian government for caution to avoid jeopardizing its environmental and social sustainability. The report also says that: “Rich countries spent up to $15 billion last year supporting biofuels while blocking cheaper Brazilian ethanol, which is far less damaging for global food security."

A World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

research report published on July 2008 found that from June 2002 to June 2008 "biofuels and the related consequences of low grain stocks, large land use shifts, speculative activity and export bans" pushed prices up by 70 percent to 75 percent. The study found that higher oil prices and a weak dollar explain 25-30% of total price rise. The study said that "...large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices" and also stated that "Brazil's sugar-based ethanol did not push food prices appreciably higher". The Renewable Fuels Association

Renewable Fuels Association

The Renewable Fuels Association is an American lobbying organization which promotes policies, regulations, and research and development initiatives that will lead to the increased production and use of ethanol fuel...

(RFA) published a rebuttal based on the version leaked before its formal release. The RFA critique considers that the analysis is highly subjective and that the author "estimates the impact of global food prices from the weak dollar and the direct and indirect effect of high petroleum prices and attributes everything else to biofuels."

An economic assessment by the OECD also published on July 2008 agrees with the World Bank report regarding the negative effects of subsidies and trade restrictions, but found that the impact of biofuels on food prices are much smaller. The OECD study is also critical of the limited reduction of GHG

Greenhouse gas

emissions achieved from biofuels produced in Europe and North America, concluding that the current biofuel support policies would reduce greenhouse gas emissions from transport fuel by no more than 0.8 percent by 2015, while Brazilian ethanol from sugar cane reduces greenhouse gas emissions by at least 80 percent compared to fossil fuels. The assessment calls on governments for more open markets in biofuels and feedstocks in order to improve efficiency and lower costs. The OECD study concluded that "...current biofuel support measures alone are estimated to increase average wheat prices by about 5 percent, maize by around 7 percent and vegetable oil by about 19 percent over the next 10 years."

Another World Bank research report published on July 2010 found their previous study may have overestimated the contribution of biofuel production, as the paper concluded that "the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors (the so-called ”financialization of commodities”) may have been partly responsible for the 2007/08 spike."

External links

FAO World Food Situation
- World Food Security: the Challenges of Climate Change and Bioenergy
Towards Sustainable Production and Use of Resources: Assessing Biofuels, United Nations Environment Programme
United Nations Environment Programme
The United Nations Environment Programme coordinates United Nations environmental activities, assisting developing countries in implementing environmentally sound policies and practices. It was founded as a result of the United Nations Conference on the Human Environment in June 1972 and has its...

, October 2009
The World Bank: Food Price Crises
Plenty of Space for Biofuels in Europe
Benefits of Distillers Grains, VeraSun
Oxfam International: Another Inconvenient Truth: Biofuels are not the answer to climate or fuel crisis
Global Trade and Environmental Impact Study of the EU Biofuels Mandate by the International Food Policy Institute (IFPRI) March 2010

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Food price inflation

Ethanol fuel as an oxygenate additive

Other factors

Government regulations of food and fuel markets

Oil price increases

US government policy

Freeze on first generation biofuel production

Non-food crops for biofuel

Biodiesel

Bioalcohols

Biofuel from food byproducts and coproducts

Biofuel subsidies and tariffs

Reduce farmland reserves and set asides

Sustainable production of biofuels

Continuation of the status quo

Impact on developing countries

National Corn Growers Association

Controversy within the international system

The 2007 controversy: Ethanol diplomacy in the Americas

The 2008 controversy: Global food prices

See also

External links