Fuelling the debate

Late last week the Guardian newspaper in Britain exposed a secret report prepared by an expert for the World Bank, which estimated that biofuels have forced up food prices by 75%. (See http://www.guardian.co.uk/environment/2008/jul/03/biofuels.renewableener...)

This report, if accurate, is shocking, as up to now the US administration has claimed that biofuels have contributed less than 3% to food price inflation, while development experts in South Africa have pegged the figure at 30%.

So far, George Bush has blamed rising incomes and demand in China, India and Brazil, for most of the inflation in food prices, but the leaked report seems to indicate that increased demand for food in these countries is not the major problem.

There must be questions as to why this World Bank report was kept confidential. Oxfam is one among many voices which have begun to blame political leaders for suppressing evidence that biofuels are a huge factor in recent food inflation -- which has seen prices more than double in many areas over the past year. Recent food inflation has also caused around 1000 million people to fall below the poverty line. 

So, if world leaders have been suppressing or ignoring evidence that biofuels are the major problem, why have they been doing so? Well many involved in big agribusiness stand to make a lot of money from biofuels -- potentially much more money than from food crops. Also, if there is a big backlash against biofuels, it means a bigger energy crisis for the world, but particularly for the energy-hungry developed industrial nations. We know that oil is going to become ever more scarce. So with declining oil supplies and no viable options such as biofuels, whole economies could start grinding to a halt.

Finally, governments have pointed to the development of biofuels as evidence that they are doing something about climate change. The argument is that biofuels are a greener alternative to fossil fuels such as coal and oil. But even this is now being disputed, and some experts claim that biofuels can actually contribute more to carbon emissions than fossil fuels.

So it will be interesting to see what eventually takes priority -- the hunger of the poor, most of whom are in the developing world -- or the demand (most of it in the developed world) for ever-more energy.

But of course, the choice is not that easy or stark. After all, if there's an energy crisis, that also has huge implications for food production and for the global economy. And of course it will be the poor who suffer the most.

It's a depressing picture, but there is one ray of light in the Guardian report, though -- apparently the World Bank report states that biofuels made from sugarcane have not had such a big impact on food inflation. Brazil specialises in sugarcane-based biofuels, and this is potentiall something that countries like South Africa can look into too.

But this latest report provides just another indication that our world is changing in huge and important ways -- and we haven't yet even begun to grasp the implications.