FOOD SECURITY - The World Bank has warned rising food prices have risen 36% in the last year, reaching dangerous levels and pushing millions into poverty.
The unrest in the Middle East, Africa and Haiti has been linked to food security issues. According to the Food and Agriculture Organisation of the United Nations (FAO), currently nearly one billion people live in hunger.
Although the reasons for this are complex, there is one significant contributor to global hunger that a shift in policy and consumer attitudes will help to alleviate.
There are many assessments which suggest that the growing number of hungry people on the planet is a result of the lack of available food. Global population growth and a shift towards higher consumption of meat in developing nations are creating challenges for production to keep pace with demand.
Even so, the supply of cereals has been steadily increasing over past years and decades, with improvements in agricultural technologies and GM crops.
In particular, production of corn and sugar in the United States and Brazil respectively, has increased greatly over the past decade. In the US, the already massive corn crop has grown by around 30% this decade and production of sugar in Brazil has increased by 50% in the same period.
With this massive increase in supply, the price of these food stuffs could have been expected to stabilise given steadily growing demand.
Instead, the price of both of these commodities has tripled within the same timeframe. As a result of price rises such as these, food security for our modern, globalised world has never looked so grim: The FAO’s Food Price Index currently sits at its highest since records began.
It may be difficult to comprehend that prices can increase so dramatically when supply is steadily increasing at the same time. To grasp this conundrum we must understand that this great increase in food production was never destined for consumption by humans, not even in the sense of secondary consumption, through animal feedstock.
Food as fuel
This food was grown to produce bioethanol - fuel for transportation. In the past decade bioethanol production in both Brazil and the US has increased by around 300%. It’s estimated that the US now uses a third of its entire corn crop for the production of ethanol, whilst Brazil uses half of its sugar for the same purpose.
This diversion of food to fuel is having a serious impact on the lives of many of those who live in the least developed and developing countries. As food is diverted to ethanol production, upward pressure is put on both inflation and the price of food globally.
This means that a greater proportion of the wages of those living in or close to poverty must be diverted to buy food, leaving less – if any – discretionary spending. This has serious impacts on health, education and quality of life in general, and has been a significant factor in the rising discontent in many countries around the world.
Not clean, or green
The justification for the production of ethanol from food is that it is an environmentally friendly alternative to petroleum based fuels in that it produces less CO2. When measured at the tailpipe, bioethanol does reduce CO2 emissions, but when the entire process of growing the product and producing ethanol is taken into account, a different picture emerges. CO2 is released in the production of ethanol through fuel for machinery, the production of fertilisers and pesticides, energy required for distillation, concurrent soil degradation and nitrous oxide release.
As a consequence, the net benefit is either minimal or in some cases, as with corn, produces more CO2 than just burning the oil in the first place. There is a growing awareness of this in scientific circles, yet the idea of ethanol being a ‘clean and green’ fuel persists in political and public discussion.
We must quickly move away from this notion. Apart from the questionable CO2 benefits, there are several factors that indicate that bioethanol is not the green alternative it is supposed to be. Examples are; the tendency to encourage the destruction of rainforests, the spread of monoculture, the massive water footprint associated with ethanol production, the involvement of large corporations not normally associated with environmental protection such as BP and Monsanto, and the spread of large scale commercial agriculture away from smaller family and indigenously owned farms.
Pressure for cheap alternatives
These all point to the idea that the recent growth in ethanol production, although perhaps a brainchild of the environmental movement, has now been adopted by multinational corporations and large energy firms looking to diversify into a burgeoning field of energy production.
In George W. Bush’s 2007 State of the Union address, he strongly emphasised the use of ethanol as a means of helping to decrease the US’s heavy dependence on imported oil. With the price of oil increasing due to unrest in the Middle East and elsewhere, pressure for a cheaper substitute to petroleum based fuel is also increasing.
This encourages efforts to produce alternative supplies of fuel. The fact is that ethanol production is more about improving national energy security, especially in the United States, than combating climate change. On top of this, due to the inefficiency and costs involved in producing ethanol, large government subsidies are required to fund what is essentially an unprofitable enterprise.
It must be noted that not all ethanol products are created equally. Biodiesel and second generation biofuels from cellulosic ethanol, made from products like algae and switchgrass, may hold the promise of both reducing CO2 emissions over the full fuel cycle as well as not competing with food.
The Federal Government’s $15 million Second Generation Biofuels Research and Development Fund is a step in the right direction. Hopefully this funding will be more fruitful than the hundreds of millions of dollars sunk into subsidies and import protection by the Australian government for first generation biofuels which have virtually nothing to show for it after nearly a decade.
The ethanol industry in Australia is still far from commercially viable. The current subsidy for Australian ethanol producers is 38 cents per litre. Optimistic assessments estimate that second generation bioethanol may become commercial feasible around 2030. In the meantime the pressure to produce bioethanol from traditional foodstuffs will only increase.
It is clearly important that the federal and state governments seriously review all policies associated with bioethanol. The Queensland government, responding to the uncertainty about the benefits of biofuels raised in a 2009 CSIRO paper, is reviewing its ethanol legislation.
The findings in the report show that if Australia were to divert 20% of its entire cereal, oilseed and sugar crop to ethanol production, we would reduce Australia’s total carbon footprint by less than 0.5%. The NSW Office of Biofuels, claims that legislation mandating replacement of all regular unleaded with E10 (10% ethanol content) by mid 2012 is providing “cheaper, cleaner and greener fuel”.
The NRMA has recently stated that the cost of E10 could be pushed as high as the higher quality premium 95 petrol due to the lack of availability of bioethanol. Due to the fact that the ethanol industry is unable to meet the false demand created by mandatory government requirements, the federal government is planning to cut the excise on imported ethanol which will make it easier to import the cheaper Brazilian ethanol.
Independent Federal Member Tony Windsor recently released a statement criticising these actions by the Federal government, claiming that ethanol is an important part of the solution to climate change. But it must be kept in mind that the ethanol industry has been subsidised and promoted on what is essentially now known to be a false premise: That ethanol is good for the environment. Even if it does have a small net benefit for CO2 reduction, the massive water footprint, land degradation, forest destruction and monoculture creation ironically tips the balance in favour of petroleum based fuel being the more environmentally friendly product overall.
A strong social and moral argument can be made against bioethanol given its role in adding to hunger. It is easy to forget that the impossibly large number of nearly a billion hungry people is made up of individuals and families from all parts of the globe, suffering from what is essentially a violence upon the body.
This is not violence in the ‘gun the head’ traditional sense, but in the sense that chronic hunger brings about real physical pain and real emotional anguish. The amount of corn burned in American cars each year is enough to feed 350 million people. When we combine this with the environmental impacts described above, it is difficult to justify further investment in the production and use of first generation bioethanol.
Policymakers often favour economics over social arguments as the costs and benefits are easier to assess. In this respect, the United States currently spends $6 billion in subsidies to support its ethanol industry. The Brazilian government have been protecting their ethanol industry for decades. The Biofuels Association of Australian claims that without the protection currently afforded it by the Federal Government, the industry will go “up in smoke”.
As for the market, many motorists have voted with their bowsers, with sales of regular E10 unleaded falling dramatically as those who either don’t trust, like or are unable to use ethanol shift to a different product. Additionally, shocks to agriculture like droughts and the recent Queensland floods, will simultaneously push up the price of food and fuel if we rely on bioethanol. With this in mind, Governments must seriously ask themselves what the economic benefits are of further encouraging bioethanol in Australia.
A final argument can be made if we step back and take into account the security and stability of our region. FAO data shows that the largest number, over 50%, of chronically hungry people are living in the Asia Pacific. We have all witnessed the violence related to food security spread throughout the Middle East and Africa. To see the same events spread throughout our region would be deeply destabilising, and the last thing that the Australian government wants is to have neighbouring governments breaking down into civil strife and conflict.
Europe is currently dealing with large numbers of refugees and irregular migrants fleeing the various conflicts in the Middle East and Africa. This is challenging border controls, relief agencies and national harmony. As order breaks down, hunger, poverty and deprivation are leading to the radicalisation of many who seek to wrestle power from their governments by whatever means possible. When governments quell large popular uprisings by force, they are effectively delegitimised. Although there are always other factors in play when instability like this occurs, the role of food as an ignition for the conflict should not be downplayed.
We all want cheaper fuel, but we must ask ourselves ‘at what cost?’ Are we prepared to push or allow our governments to make policies that have only a small chance of lowering the price of fuel and that may decrease our carbon footprint marginally, but that add to chronic hunger in the developing world? And what about hunger induced violence? Are we prepared to add to the risk of this on our doorstep for the chance of providing ourselves with a slight increase in energy security.
Knowledge of the facts is vital and it is important that politicians do not seek to score cheap political points that result in adding to the misery of those living in hunger. Governments must seek to discourage any policy or action that promotes the use of food as fuel, whilst encouraging innovation in second generation development. This should include the banning or taxing of bioethanol imports from countries using first generation processing.
If governments are serious about reducing CO2 in the transport sector, they would be better to invest in energy efficiencies such as hybrid or electric cars, public transport systems and major infrastructure projects like the Very Fast Train network.
In the meantime, the best actions that can be taken is by consumers at the petrol pump. I know which bowser I won’t be going to next time I fill up.