Winnipeg, 10 February 2012: The Frontier Centre released today a paper entitled Food Inflation and Biofuel Production: Will the Pursuit of Clean Energy be Made Off the Back of the World’s Poor? Authored by Frontier’s student intern Eric Merkley, the study examines some of the dire unintended consequences of biofuel production.
The increasingly production of ethanol using corn feedstock, for example, has contributed to demand-side increases in the price of corn in the last decade. The impact of crop displacement and higher livestock feed prices creates ripple effects throughout the agriculture market that cause general food inflation – the extent of this effect is still fiercely debated. In addition, the impact of biofuel on food prices is projected to contribute significantly to malnourishment in the developing world, as the poor pay a higher proportion of their income on food.
“Biofuel production can be particularly devastating in the case of an impoverished country such as Mexico,” Merkley writes. “Approximately 107 million Mexicans live in poverty. They rely on corn tortillas and many other corn based staples for their calories. Mexico receives 80 per cent of its corn imports from the United States, and in 2006, the price of corn increased 50 per cent from $2.80 to $4.20. To stem public outcry, President Felipe Calderon capped the price of corn in January 2007. This problem will escalate, as corn prices were projected to increase 41 per cent by 2010. The crisis will extend beyond corn. For example, cassava is a staple that provides one-third of the calories for 200 million of Africa’s poor. It is also a starch used for ethanol production. The price of cassava is set to rise 135 per cent by 2012. The consequences of biofuel production will reverberate around the world.”
All energy production has an economic, social and environmental cost. Becoming increasingly aware of the social cost of biofuel production through the use of foodstuffs presents most industrial states who mandate or wish to mandate automobiles fuels to include a proportion of ethanol with the moral of hurting the local poor through rising food prices and hurting those in poorer countries even more for the sake of a nearly symbolic cut in carbon emissions from tail pipes.
Inflation and Biofuel Production: Will the Pursuit of Clean Energy be Made Off the Back of the World’s Poor? can be downloaded HERE.