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Growing Food to Feed Cars Will Continue to Drive Up the Price of Food

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

 

Written by John-Paul Maxfield

John-Paul Maxfield is the founder of Waste Farmers. Waste Farmers is a next generation sustainable agricultural company focused on helping humanity meet current and future food demands, while decreasing agriculture’s environmental footprint. The Company started in 2009 with $9,000 and a belief that idealism and capitalism can coexist. Today Waste Farmers has evolved into an innovator respected by leaders in the global community for developing simple solutions to the complex problems of modern agriculture and food security. Prior to starting Waste Farmers, John-Paul founded the "The Inspired Economist", a blog focused on covering the people, places, ideas, and technologies inspiring positive change and redefining capitalism.
In addition, John-Paul served as an Associate a private equity group specializing in small to mid cap service companies. In this capacity he focused on planning, forecasting, budgeting, and performance evaluation of MBH and its designated subsidiaries. Prior to joining MBH, John-Paul was an Analyst with Alvarez and Marsal where he spent the majority of his time on a team that aided Louisiana’s Recovery School District with the restoration of public schools post Hurricanes Katrina and Rita.

John-Paul is active in the Colorado community, serving on the Board of the Rocky Mountain MS Center. In 2007 he was selected as one of the “Fifty for the Future” by the Colorado Statesman and is a graduate of the inaugural class of Impact Denver. John-Paul holds a BA from the University of Colorado.

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