As the demand for biofuels increases, so too will food prices around the world. The U.N.’s Food and Agriculture Organization’s recent report notes that “the historic linkages between agriculture and the energy sector are becoming stronger and are changing in character. Biofuel demand will continue to exercise upward pressure on agricultural prices for considerable time to come.” Biofuel production based on agricultural commodities increased more than threefold from 2000 to 2007, and now covers nearly two percent of the world’s consumption of transport fuels.
The question is, at what point are biofuels more trouble than they are worth and what do increased food prices mean for developing nations? According to FAO Director-General Jacques Diouf, “biofuels present both opportunities and risks. The outcome would depend on the specific context of the country and the policies adopted. Current policies tend to favor producers in some developed countries over producers in most developing countries. The challenge is to reduce or manage the risks while sharing the opportunities more widely.” Some of these opportunities include income and employment, if poor small farms can gain access to markets. Giving poor farmers the access and tools that they will need to compete requires investment in infrastructure, research, rural finance, market information and institutions and legal systems. Director Diouf stresses that “decisions about biofuels should take into consideration the food security situation but also the availability of land and water. All efforts should aim at preserving the utmost goal of freeing humanity from the scourge of hunger.”
Candidly, I am torn. I see the benefits of biofuels, but I just can’t shake the feeling that the highest and best use of agricultural land is for production of crops that feed humans, not cars. A step too far in the direction of fuel production may escalate situations not unlike those that we are beginning to face today, where cars are fed in rich nations at the expense of people in developing nations.
What are your thoughts?
Photo Credit: The U.N.’s Food and Agriculture Organization