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Are biofuels starving the world's poor?

Published: Thursday, Jan. 10 2013 3:35 p.m. MST

As corn prices skyrocket and land is removed from food production to produce ethanol, some unintended consequences of fuel policies designed to cut carbon emissions are coming into focus.

“There are pros and cons to biofuel, but not here,” Misael Gonzáles of C.U.C., a labor union for Guatemala’s farmers, told the New York Times. “These people don’t have enough to eat. They need food. They need land. They can’t eat biofuel, and they don’t drive cars.”

The direct impact of high corn prices is felt in tortillas, but also in eggs, with local chickens also dependent on feed corn.

The Times report, which appeared on Thursday, focused on the ripple effects of higher corn prices on Guatemalan peasants, who are forced to import most of their corn at higher world prices and whose domestic cornfields have been supplanted with sugarcane and other crops to create more ethanol for U.S. and European markets.

"The American renewable fuel standard mandates that an increasing volume of biofuel be blended into the nation’s vehicle fuel supply each year to reduce carbon dioxide emissions from fossil fuels and to bolster the nation’s energy security," the Times reported. "Similarly, by 2020, transportation fuels in Europe will have to contain 10 percent biofuel."

A 2011 analysis by Bruce A. Babcock, an agricultural economist at Iowa State University, did not offer a simple answer about the role that government ethanol subsidies play in causing food price spikes.

"Biofuel supporters point out that higher agricultural prices have a small impact on food prices because their value makes up such a small share of the final consumer food dollar," Babcok wrote. "Although this is true for developed countries, in poor countries, because many people in eat relatively unprocessed food, their food prices are much more responsive to increased commodity prices."

The role of biofuels in spiking food costs has long been controversial. In 2008, the UK's Guardian reported on an unpublished World Bank study, which apparently held that biofuels had forced food prices up dramatically worldwide.

"The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3 percent to food-price rises," the Guardian reported. "It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil."

Guatamala's quandary is especially ironic because the country was self-sufficient in corn production until the 1990s, when cheap U.S. exports forced the domestic corn industry out of business.

"Guatemalan farmers could not compete, and corn production dropped roughly 30 percent per capita from 1995 to 2005," the Times reported.

Now, with Guatamala heavily dependent on imports, corn prices are spiking and land is being diverted.

As early as 2008, Europe was under pressure for its move to raise ethanol to 10 percent of its fuel mix, as UN Special Rapporteur for the Right to Food Jean Ziegler told German radio Monday that the production of biofuels is "a crime against humanity" because of its impact on global food prices, according to an Agence France-Presse report at the time.

"We don't have an enormous danger of too much of a shift from food production to biofuels production," Michael Mann, spokesman for EU Agriculture Commissioner Mariann Fischer Boel, had told AFP.

Today, Europe is singing a somewhat different tune. "Concerned about the effects of its biofuel mandate on world hunger," the New York Times reported, "the European Commission recently proposed amending its policy so that only half of its 2020 target could be met by using biofuels made from food crops or those grown on land previously devoted to food crops."

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