Food vs. fuel no image

Published on April 14th, 2008 | by Clayton

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"Perfect Storm" Inflating Food Prices Worldwide


bread, food, grain, biofuelsAdding to the ongoing discussion about biofuels affecting worldwide food prices (see Biodiesel Is Raising Food Prices), NPR’s Morning Addition briefly interviewed World Bank President Robert Zoellick last Friday.

Zoellick called it a “perfect storm of things coming together…” and listed 7 different issues contributing to the increasing cost of food, which led to rioting in Haiti and Egypt last week, along with a general strike in Burkina Faso:

  1. High energy prices (which affects production and shipping costs).
  2. Increase in demand from developing countries: “going from 1 meal a day to 2 meals a day” leads to an increase in the amount of food needed.
  3. More meat in diets in developing countries.
  4. Increased production of biofuels.
  5. Droughts in important growing regions, including Australia and Europe.
  6. Reduced food stocks.
  7. Commodities trading/futures trading: food being used as a financial instrument.

Zoellick underscored that none of these issues was solely responsible for increasing food prices, but NPR’s host Steve Inskeep pressed Zoellick on how much biofuels were contributing.

He noted that a recent report released by the World Bank seemed to indicate that biofuels were the primary issue, but Zoellick maintained that it wasn’t that simple. Rather, the “combinations of events have led to an emergency situation.” But he also said:

“Biofuels is [sic] no doubt a significant contributor. It is clearly the case that programs in Europe and the United States that have increased biofuel production have contributed to the added demand for food.”

Listen to the Morning Addition radio broadcast (only 5 minutes): World Bank Chief: Biofuels Boosting Food Prices, or see last week’s post, Biodiesel Myth (Or Fact?) #23: Biodiesel is Raising Food Prices.

Related Posts:

Europe’s EPA Advises Suspending Biofuel Targets

Biodiesel Mythbuster 2.0: Twenty-Two Biodiesel Myths Dispelled

2015: 30% of US Corn Harvest Will Be Gasoline

Which is Worse: Exporting $1 Billion Per Week or Growing Fuel?

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About the Author

In a past life, Clayton was a professional blogger and editor of Gas 2.0, Important Media’s blog covering the future of sustainable transportation. He was also the Managing Editor for GO Media, the predecessor to Important Media.



  • http://gas2.org Clayton B. Cornell
  • http://gas2.org Clayton B. Cornell
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  • http://www.linkedin.com/in/pursley Chad

    I don’t have any formal economic training but isn’t this a good thing in the long run. I feel like in the short term we should plan quite a bit of humanitarian aid, but in the long run an increased food price is a good thing.

    Assuming both 1 & 4 are true then one way or another we must pay more to transport food, so switch to biofuel which will at least lower the energy prices.

    Numbers 2 & 4 will improve human health and so I would like to see those trends continue.

    Number 5 we can’t do anything about, but hopefully it is temporary.

    Number 6 in the long run if food producers can make larger profits by selling food at a better price and by selling biofuel. If there is more money to be made people who work in agriculture will increase their purchasing power and improve their economy. Which according to the US government stats most of the developing countries have fairly large percentages of people working in agriculture. See link:

    https://www.cia.gov/library/publications/the-world-factbook/fields/2048.html

    Although alot needs to be done to ensure justice is respected and people stay alive long enough to enjoy it. This crisis may present more opportunity that disaster.

  • http://www.linkedin.com/in/pursley Chad

    I don’t have any formal economic training but isn’t this a good thing in the long run. I feel like in the short term we should plan quite a bit of humanitarian aid, but in the long run an increased food price is a good thing.

    Assuming both 1 & 4 are true then one way or another we must pay more to transport food, so switch to biofuel which will at least lower the energy prices.

    Numbers 2 & 4 will improve human health and so I would like to see those trends continue.

    Number 5 we can’t do anything about, but hopefully it is temporary.

    Number 6 in the long run if food producers can make larger profits by selling food at a better price and by selling biofuel. If there is more money to be made people who work in agriculture will increase their purchasing power and improve their economy. Which according to the US government stats most of the developing countries have fairly large percentages of people working in agriculture. See link:

    https://www.cia.gov/library/publications/the-world-factbook/fields/2048.html

    Although alot needs to be done to ensure justice is respected and people stay alive long enough to enjoy it. This crisis may present more opportunity that disaster.

  • Proto

    How does a switch to biofuel lower energy prices when biofuel is less efficient? Biofuel was meant as a way to decrease energy dependence of oil, never meant to be a more efficient form of energy, because it’s not. A lot of companies use fossil fuel to power their ethanol plants in the U.S. because it’s cheaper. Also, land is limited, and you can’t produce whatever you want however much you want, you should try to read more about the dust bowl.

  • Proto

    How does a switch to biofuel lower energy prices when biofuel is less efficient? Biofuel was meant as a way to decrease energy dependence of oil, never meant to be a more efficient form of energy, because it’s not. A lot of companies use fossil fuel to power their ethanol plants in the U.S. because it’s cheaper. Also, land is limited, and you can’t produce whatever you want however much you want, you should try to read more about the dust bowl.

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  • DUANE KOCH

    Forgive me, but I thought a significant amount of biodiesel in this country was being refined from used cooking oil. I have even seen company trucks collecting the stuff from restaurants.

  • DUANE KOCH

    Forgive me, but I thought a significant amount of biodiesel in this country was being refined from used cooking oil. I have even seen company trucks collecting the stuff from restaurants.

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  • Dave Todaro

    Many poorer nations, where people are on the economic margin and struggle to purchase food, are agrarian economies whose farmers are producing for their own countrymen. Lower global food prices combined with grain exports from richer economies that subsidize grain, equals a situation where the farmers in these nations cannot sell their food at a profit. The farmers in these countries are not helped by lower food prices; so that ultimately, the populations of those nations are also not helped in the long run.

    We’re also producing more and more of our biofuels such as ethanol from switchgrass and other non-food crops; so that if corn ethanol really ever was making it harder for people to eat, which is a dubious claim, that problem is going away as we learn to rely on other crops. My own reading reveals that switchgrass yield 3-4 X as much ethanol per acre than corn.

    Then, there’s the question of acres available to produce food vs. biofuels. Crops like switchgrass and agave can be grown in places where food crops can’t be grown. That increases the acreage that’s available for one or the other; and it expands the options that farmers have to produce what makes the most economic sense for them. It also gives farmers more crop rotation options. None of this hurts farmers in poorer countries; that’s for sure.

    Let’s be careful before we blame biofuels on world hunger. I understand “supply and demand” as well as anyone, but we’ve got to analyze the right data and focus on the correct cause and effect relationships if we want to understand the truth through economics. The more I learn, the more I’m convinced that economic arguments against even corn-derived ethanol are based on incomplete data and analysis.

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