Rush to Use Crops as Fuel Raises Food Prices and Hunger Fears.
New York Times, April 6, 2011.
"The starchy cassava root has long been an important ingredient in
everything from tapioca pudding and ice cream to paper and animal feed.
But last year, 98 percent of cassava chips exported from Thailand, the
world's largest cassava exporter, went to just one place and almost all
for one purpose: to China to make biofuel. Driven by new demand, Thai
exports of cassava chips have increased nearly fourfold since 2008, and
the price of cassava has roughly doubled.
Each year, an ever larger portion of the world's crops - cassava and corn,
sugar and palm oil - is being diverted for biofuels as developed countries
pass laws mandating greater use of nonfossil fuels and as emerging
powerhouses like China seek new sources of energy to keep their cars and
industries running. Cassava is a relatively new entrant in the biofuel
But with food prices rising sharply in recent months, many experts are
calling on countries to scale back their headlong rush into green fuel
development, arguing that the combination of ambitious biofuel targets and
mediocre harvests of some crucial crops is contributing to high prices,
hunger and political instability.
This year, the United Nations Food and Agriculture Organization reported
that its index of food prices was the highest in its more than 20 years of
existence. Prices rose 15 percent from October to January alone,
potentially "throwing an additional 44 million people in low- and
middle-income countries into poverty," the World Bank said.
Soaring food prices have caused riots or contributed to political turmoil
in a host of poor countries in recent months, including Algeria, Egypt and
Bangladesh, where palm oil, a common biofuel ingredient, provides crucial
nutrition to a desperately poor populace. During the second half of 2010,
the price of corn rose steeply - 73 percent in the United States - an
increase that the United Nations World Food Program attributed in part to
the greater use of American corn for bioethanol.
In the United States, Congress has mandated that biofuel use must reach 36
billion gallons annually by 2022. The European Union stipulates that 10
percent of transportation fuel must come from renewable sources like
biofuel or wind power by 2020. Countries like China, India, Indonesia and
Thailand have adopted biofuel targets as well.
To be sure, many factors help drive up the price of food, including bad
weather that ruins crop yields and high oil prices that make
transportation costly. Last year, for example, unusually severe weather
destroyed wheat harvests in Russia, Australia and China, and an
infestation of the mealy bug reduced Thailand's cassava output.
Olivier Dubois, a bioenergy expert at the Food and Agriculture
Organization in Rome, said it was hard to quantify the extent to which the
diversions for biofuels had driven up food prices.
"The problem is complex, so it is hard to come up with sweeping statements
like biofuels are good or bad," he said. "But what is certain is that
biofuels are playing a role. Is it 20 or 30 or 40 percent? That depends on
While no one is suggesting that countries abandon biofuels, Mr. Dubois and
other food experts suggest that they should revise their policies so that
rigid fuel mandates can be suspended when food stocks get low or prices
become too high.
It can be tricky predicting how new demand from the biofuel sector will
affect the supply and price of food. Sometimes, as with corn or cassava,
direct competition between purchasers drives up the prices of biofuel
ingredients. In other instances, shortages and price inflation occur
because farmers who formerly grew crops like vegetables for consumption
plant different crops that can be used for fuel.
China learned this the hard way nearly a decade ago when it set out to
make bioethanol from corn, only to discover that the plan caused alarming
shortages and a rise in food prices. In 2007 the government banned the use
of grains to make biofuel.
Chinese scientists then perfected the process of making fuel from cassava,
a root that yielded good energy returns, leading to the opening of the
first commercial cassava ethanol plant several years ago.
In addition to expanding cassava cultivation at home, China is buying from
Cambodia and Laos as well as Thailand.
Although a mainstay of diets in much of Africa, cassava is not central to
Asian diets, even though the Chinese once called it "the underground food
store" because it provided crucial backup nutrition in lean harvest years.
So the Chinese reasoned that making fuel with cassava would not directly
affect food prices or create food shortages, at least at home. The
proportion of Chinese cassava going to ethanol leapt to 52 percent last
year from 10 percent in 2008.
More distant or indirect impacts are considered to be likely, however.
Because cassava chips have been commonly used as animal feed, new demand
from the biofuels industry might affect the availability and cost of meat.
In Southeast Asian countries where China is paying generously for
stockpiles of cassava, farmers may be tempted to grow the crop instead of,
for example, other vegetables or rice.
And if China turned to Africa as a source, one of that continent's staple
food crops could be in jeopardy, although experts note that exporting
cassava could also become a business opportunity.
The Chinese demand for cassava could also dent planned biofuel production
in poorer Asian nations: in the Philippines and Cambodia, developers were
recently forced to suspend the construction of cassava bioethanol plants
because the tuber had become too expensive.
Thailand's own nascent biofuel industry may have trouble getting the
homegrown cassava it needs because it may not be able to match the prices
offered by Chinese buyers, according to the Food and Agriculture
Biofuels development in wealthier nations has already proved to have a
powerful effect on the prices and the cultivation of crops. Encouraged by
national biofuel subsidies, nearly 40 percent of the corn grown in the
United States now goes to make fuel, with prices of corn on the Chicago
Mercantile Exchange rising 73 percent from June to December 2010.
Such price rises also have distant ripple effects, food security experts
say. "How much does the price of corn in Chicago influence the price of
corn in Rwanda? It turns out there is a correlation," said Marie Brill,
senior policy analyst at ActionAid, an international development group.
The price of corn in Rwanda rose 19 percent last year.
"For Americans it may mean a few extra cents for a box of cereal," she
said. "But that kind of increase puts corn out of the range of
Higher prices also mean that groups like the World Food Program can buy
less food to feed the world's hungry.
European biofuels developers are buying large tracts of what they call
"marginal land" in Africa with the aim of cultivating biofuel crops,
particularly the woody bush known as jatropha. Advocates say that
promoting jatropha for biofuels production has little impact on food
supplies. But some of that land is used by poor people for subsistence
farming or for gathering food like wild nuts.
"We have to move away from the thinking that producing an energy crop
doesn't compete with food," said Mr. Dubois of the Food and Agriculture
Organization. "It almost inevitably does." "
Dr. Ann C. Wilkie Tel: (352)392-8699
Soil and Water Science Department Fax: (352)392-7008
University of Florida-IFAS
P.O. Box 110960 E-mail: [log in to unmask]
Gainesville, FL 32611-0960
Campus location: Environmental Microbiology Laboratory (Bldg. 246).
BioEnergy and Sustainable Technology Society