Many politicians deny or minimize the link between ethanol production and global food prices. The evidence proves them wrong.
To anyone with any insight at all, there is an obvious connection between food prices and what Fidel Castro has justly called “the sinister idea of converting food into fuel.”
That hasn’t stopped politicians in the United States, Europe and Canada from minimizing or denying the link.
- “Those rising global food prices have nothing to do biofuels.” – German Chancellor Angela Merkel, April 17, 2008
- “… about 1.5% of that [food price inflation], is due to an increase in biofuel production.” – White House spokesperson Scott Stanzel, May 5, 2008
- “…our decision here in Ontario is not having a significant impact because of a whole bunch of circumstances that are driving up food prices.” Ontario (Canada) Premier Dalton McGuinty, April 16, 2008.
They’ll probably deny this as well:
On May 7, Mark W. Rosegrant, a director of the International Food Policy Research Institute, testified before the U.S. Senate’s Homeland Security Committee. He reported on an economic modeling study conducted by the IFPRI into the effect of biofuel production on food prices.
First the IFPRI looked at current grain prices.
“Unsurprisingly, the biggest impact was on maize prices, for which increased biofuel demand is estimated to account for 39 percent of the increase in real prices. Increased biofuel demand is estimated to account for 21 percent of the increase in rice prices and 22 percent of the rise in wheat prices.”
Then they looked at what would happen if worldwide biofuel production is frozen:
“If biofuel production was frozen at 2007 levels for all countries and for all crops used as feedstock, maize prices are projected to decline by 6 percent by 2010 and 14 percent by 2015. Smaller price reductions are also expected for oil crops, cassava, wheat, and sugar.”
And finally, at the impact of abolishing biofuels entirely:
“If biofuel demand from food crops were abolished after 2007 (in other words, if a global moratorium on crop-based biofuel production were imposed), prices of key food crops would drop more significantly—by 20 percent for maize, 14 percent for cassava, 11 percent for sugar, and 8 percent for wheat by 2010.”