food versus fuel

The use of food crops for fuel is becoming has been growing throughout the world.  Brazil, for example, is now getting almost 50% of its transportation fuel from biofuels.  Ethanol production is up significantly in the United States and continues to get very strong support from the Bush administration. Production grew from 5 billion gallons in 2005 to over 11 billion gallons in 2007.  As a result a greater percentage of corn crops are being diverted to ethanol production.  The latest estimates from the U.S. Department of Agriculture are that 22 percent of the U.S. corn crop for 2008 will be used for ethanol. This is up 17% from the year before 

The laws of supply and demand continue to apply so with the ethanol industry creating additional demand for corn, prices for corn in the U.S. were bound to rise, and they have.  The price of corn has jumped from $1.86 per bushel at the end of 2005 to over $6 per bushel in 2008. These rising prices are causing significant problems for developing countries, even leading to food riots in parts of Africa, Haiti and the middle east.

No single factor is to blame for these rising prices. There has been drought throughout China and much of the rest of Asia which had reduced local supply and increased the need for exports.  The value of the dollar continues to drop dramatically which in turn raises the price of corn when valued in U.S. dollars.  And there is significant evidence that demand for corn and other grains is being driven by a fundamental change in diet in India and China as these populations begin eating more meat. That being said there is still plenty of reason to believe that ethanol production is partly to blame for the dramatic rise in corn.  A recent study by two agricultural economists from the University of Wisconsin, Fortenberry and Park, showed a clear relationship between rising corn prices and ethanol production in the U.S.

Increased production of bio-fuels hasn't just increased the price of corn, other grains and foods have been impacted as well because of increased competition.  For example, at many feedlots the rising price of corn as feed has led many cattlemen to switch to soybeans for feed which in turn has driven up the price of soybeans. The price of sugar cane and therefore sugar has also increased as a result of bio-fuel production. Many countries in South America such as Brazil use sugar cane to create ethanol or bio-diesel.

Some advocates of bio-fuel feel that additional crops can be planted to compensate for the demand for grains which have the potential to produce ethanol and other bio-fuels.  However, this flies in the face of logic to some extent.  Today there is only so much arable land in most countries and to expand more land area for farming could have devastating consequences for fragile ecosystems.  This is already a significant problem in South America where increasing farming is causing significant damage to the rain forest which supports the world's largest diversity of plants and animals.

To some extent bio-fuels may be on the receiving end of too much well intentioned and not-so-well-intentioned hype.  While it is true that using bio-fuels can help reduce our dependence upon foreign oil to some extent, our appetites for energy and our fuel-guzzling SUV's simply create too much demand for any one fuel to satisfy. Even if the entire U.S. corn crop were used for ethanol, it would replace only about 20 percent of domestic gasoline consumption according to some experts.

It may be that the concerns surrounding bio-fuels may be by-passed by changing technology.  There has been some progress in the recent years in finding ways to use plant matter to create ethanol using plants that have no food value.  Two possibilities are to use corn stalks and corn cobs which are an agricultural waste product, or switchgrass which is a fast growing grass that is easily grown in a wide variety of climates.  However, these alternative sources by their nature contain much less plant sugar and consequently are far less efficient to use in producing energy.  It remains to be seen if they will become a viable solution.

Another source of bio-fuel that is being heavily investigated is algae.  There are several reasons for this: (1) The yields of oil from algae are orders of magnitude higher than those for traditional oilseeds, and (2) Algae can grow in places away from the farmlands and forests, thus minimizing the damages caused to the eco- and food chain systems.(3) algae can be grown in sewage and next to power-plant smokestacks where they can be used to digest potential pollutants.  Though research into algae oil as a source for biodiesel is not new, the current oil crises and the growing food versus fuel debate have made it more imperative for organizations and countries to invest more time and efforts into research on bio-fuel alternatives that do not compete with the food supply.