Food for Fuel

It seemed like a good idea at the time. What could be greener than fuel made from farm leftovers? Global food prices are now spiralling and the blame is aimed at biofuel. The risks are hard to ignore - the threat of major political instability and environmental damage in an interconnected world.

Depending on who you talk to, there are different causes, including increasing demand - more people, more people eating meat (that eats grain) and of course biofuel. A variety of supply factors are cited - drought and weather patterns in major grain producing areas (e.g. Australia), declining grain stocks globally, rising costs of farming inputs (fertilisers, fuel, labour etc), and financial market "speculators" (who we love to hate). This week on the BBC, Nobel Prize laureate Joseph Stiglitz cited evidence that demand for biofuel is the major factor (based on comparison with past price spikes). And he is not the only one suggesting this.

Demand on food reserves for biofuel has significant policy implications. Fundamentally, food and energy security should be disentangled. If this policy goal is agreed, it can and must be achieved is various ways. Numerous examples come to mind: create disincentives for using staple crops in biofuel (e.g. remove subsidies) and create incentives to use non-food materials. Productive agricultural land shouldn't be used for biofuel production (but otherwise non-productive land should). There should be priority investment in research in energy technologies that will avoid the need for food crops going into our fuel tank (biofuels are but one of many solutions to our energy requirements).

It seems simple, but we didn't talk much about the destination when we began the biofuel journey.

Links: IFPRI, Farm Policy, ABC, The Australian