The Real Culprit

Food vs fuel debate points at wrong industry
By Holly Jessen | March 10, 2011

It doesn’t take much for ethanol critics to start waving the food versus fuel flag. The blame ethanol game started again during unrest in Egypt, Libya and other areas of the world. Environmental attorney Tim Searchinger stirred up the debate with an op-ed piece published Feb. 11 in the Washington Post, which blamed biofuels for food riots. 

It’s true global food prices went up for the eighth consecutive month in February, according to the Food and Agriculture Organization of the United Nations. FAO made no mention of biofuels as a factor, however, instead pointing to growing demand, declines in world cereal production in 2010 and a 70 percent increase in export prices of major grains. “Unexpected oil price spikes could further exacerbate an already precarious situation in food markets,” said David Hallam, director of FAO’s Trade and Market Division.

Food vs. fuel is a myth, says Gal Luft, coauthor of “Turning Oil into Salt” and a proponent of an Open Fuel Standard, legislation to mandate increasing numbers of flex-fuel vehicles that run on any combination of ethanol, methanol and gas. It’s a myth perpetuated by an “orchestrated campaign” against ethanol that was financed by Big Oil, food makers and other anti-ethanol groups, he says.

Who is the real culprit? “Food prices go up, not because of ethanol. Food prices go up because oil prices go up. We saw this very clearly in 2008,” Luft tells EPM. “The major factor in the production of food is oil, the shipping, the packaging, the fertilizer and everything that goes into making food.”

In 2010, the World Bank reversed its 2008 report that biofuels caused a spike in commodity prices and later said financial investors were likely culpable. Another report by the United Kingdom’s Department for Environment, Food and Rural Affairs said biofuels role in higher food prices was small.

The U.S. ethanol industry uses only 3 percent of net world coarse grain supply, says Bob Dinneen, president and CEO of the Renewable Fuels Association. That leaves 97 percent of global grain supply of corn, wheat, rice and other grains for other uses. In addition, ethanol production is a major source of livestock feed, turning one-third of every bushel of corn into DDGS. “In 2010, the U.S. exported nearly 10 million metric tons of feed and still had 23 million metric tons available for domestic feed uses,” the RFA said. 

—Holly Jessen