Food v/s fuel: the great ethanol debate

13 December 2008

Although fuel can never score over food in the  hierarchy of needs, modern society essentially needs both to survive. Sourya Biswas reports

Would you prefer food for an empty stomach or fuel for your empty car? The question seems to be a no-brainer, and similar arguments have been advanced by the pro-food brigade who contend that energy-crop programmes compete with food crops in a number of ways (agricultural, rural investment, infrastructure, water, fertilizers, skilled labour etc.) and thus cause food shortages and price increases.

In fact, UN the special rapporteur on the right to food Jean Ziegler had gone on record decrying biofuels as a ''crime against humanity''. Even World Bank President Robert Zoellick had accused demand for ethanol as a "significant contributor" to soaring food prices around the world earlier this year.

However, arguments from the opposing side have been no less persuasive. From asserting that the world economy needs to switch to a greener alternative to the polluting and fast-depleting fossil fuels, to arguing that foodgrain shortages were caused by macroeconomic factors like droughts and escalating oil prices, the ethanol club has stood steadfast behind its cause and lobbied hard against reversing existing government incentives. The truth, as often is the case in such contentious matters, lies somewhere in between.

Food prices did rise atrociously high earlier this year, fuelled by decreased production and increased demand. And diversion of agricultural land from food crops to biomass did contribute to this shortage. However, this impact was definitely not the decisive factor, as some from the pro-food group would like us to behave. The gradual decrease in prices over the last few months is ample proof of that.

There were several factors behind the initial rise, with the two main reasons being decrease in worldwide foodgrain production due to climatic setbacks, and galloping inflation fuelled by increased oil prices. Russia, the Ukraine, Northern Europe, Argentina, Australia and other parts of the world experienced reduced crop production in 2007, due to drought, early frost and other crop problems.

This was the second year in a row of drought and reduced crop yields in many of these countries. There was a reduction in total global grain and oilseed production in 2006, and again in 2007. This was only the third time in past 37 years that global production has dropped two consecutive years.