The Weekly Reader

Biofuels boom pinches the world's poorest

Ethanol means money for farmers, but hunger for many poor people
By PHILIP BRASHER, Gannett News Service
Posted Sunday, January 14, 2007

WASHINGTON -- America's appetite for fuel ethanol could take food away from some of the world's poorest people.

The price of corn and other crops is soaring because of the demand for grain to make ethanol, a gasoline additive, and that means the government's budget won't buy as much food as it used to. The price of corn alone, a key food in Africa, has more than doubled in the past year.

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The pinch is already being felt.

Catholic Relief Services, one of several organizations that distribute U.S.-donated food in Africa and Latin America, expects to deliver 161,000 tons this year, down from 200,000 tons last year.

"In the long run, it means that we are fueling our cars with food that people might have eaten. There are important trade-offs," said Lisa Kuennen-Asfaw, director of public resources for the Baltimore group.

Congress could increase funding for food aid to make up for the higher commodity prices. But if history is a guide, that likely won't happen.

Americans, and especially American farmers, take pride in feeding the world's hungry, but the truth is that the government's food-aid programs historically have at least as much to do with helping U.S. agribusiness interests as helping the poor.

The last time there was a similar surge in commodity prices -- in the mid-1990s -- government food purchases fell sharply but rebounded when global commodity prices collapsed a few years later.

Purchases fell more than 40 percent from 1994 to 1996 but shot from 3.5 million to 10 million tons from 1998 to 1999. Since then, the volume of food has varied but the overall budget has been relatively flat, and that worries aid organizations.

"If food prices are 20 percent higher, that means you get 20 percent less food," said Gawain Kripke of Oxfam America.

Look for farm-state lawmakers to argue that the rise in commodity prices isn't such a bad thing for poor countries.

After all, critics of U.S. food aid programs have long argued that the donations can sometimes drive down the prices paid to local farmers in regions where the commodities are distributed.

"One of the things that could happen is that with prices going up overall, that could encourage agriculture in these countries," said Rep. Collin Peterson, the Minnesota Democrat who now chairs the House Agriculture Committee.

That's true, but the higher commodity prices won't be much help in the poorest countries, where farmers often can grow only enough food to feed their families.

Meanwhile, there's little sign that the ethanol boom is letting up. The industry is on track to add 6 billion gallons of production -- more than twice the current capacity -- and Congress is considering new incentives to increase production.

The biofuels boom isn't limited to the United States. Europe is ramping up production of biodiesel from vegetable oils to reduce the use of petroleum and cut greenhouse gas emissions.

"It's very clear that we need to work on environmental and conservation issues and other kinds of concerns that affect the American public," said Kuennen-Asfaw, referring to the potential benefits of alternative energy sources. "But we also have to think about the direction we're going in for poor people around the world."