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Food vs fuel

Posted 13/07/2011 by KatieJ

As a major constraint on the development of biofuels the food vs fuel debate has been raging for years, ever since corn from the Mid-West began to be used to produce biofuels in the US. Biofuel development has been blamed for food shortages and therefore pushing up the price of food around the world but like many other ‘environmental’ issues, when the request has been made: ‘Prove it’, the evidence presented seems debatable. Food riots in Mexico, for example, were blamed on shortages of corn, but the corn in question turned out not to be the kind used for biofuel production.

As one might expect this is an issue close to the heart of the US Renewable Fuels Association (RFA). It is not surprising therefore that the RFA has commissioned a study: Analysis of corn, commodity and consumer food prices, to look into this issue.

The main result of the study, conducted by research firm Informa Economics, is that there is no statistical evidence to support the argument that growth in ethanol production is driving consumer food prices higher. Rather, the report concludes that retail food prices are determined by a complex set of inter-related factors, including supply chain costs for energy, labour, transportation, packaging and other marketing-related expenses.

‘The statistical evidence does not support a conclusion that there is a strict “food vs fuel” trade-off that is automatically driving consumer food prices higher,’ says the report, adding that ‘…there has historically been very little relationship between annual changes in corn prices and consumer food prices. The corn price would be considered a statistically insignificant variable in determining what drives the food (consumer price index).’ RFA president and ceo Bob Dinneen goes further, saying that ‘yet again, sound analysis has demonstrated that the farcical food vs fuel debate is just that – a joke’.

So will this be an end to this debate, which has also had an impact on the development of second generation biofuels that are not based on potential food crops?

It is doubtful since real facts and analysis have never been allowed to stand in the way of vested interests; after all most environmental groups are now business-based and need to generate revenues just like their targets.

Neil Eisberg - Editor

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