EU caps bio-fuel use, but is it enough?

The European Commission usage of bio-fuels has had quite a few unintended consequences. Their policy of mandating some usage of bio-fuels has increased food prices, led to more hunger and destroyed rain forests. The EU now admits to at least the last point, and is now changing policy to stop it. But some hunger advocates say it is still not enough.

From the Inter Press Service, writer Daan Bauwns has this analysis. 

According to the existing European rules at least 10 percent of the EU’s transport energy must come from renewable sources by 2020, primarily through biofuels derived from wheat, soy or rapeseed. But in an unprecedented move, EU Energy Commissioner Günther Oettinger and Climate Commissioner Connie Hedegaard announced Monday that the European Commission (EC) is planning to limit the use of crop-based biofuel to five percent in the total share of renewables in transport fuel.

Just ahead of the meeting, international NGO Oxfam released a new report which demonstrates that Europe’s hunger for biofuels is pushing up global food prices and driving people off their land, resulting in deeper hunger and malnutrition in poor countries.

According to the NGO, despite soy and maize prices being at all-time highs in July and prices of cereals and oil remaining at peak levels in August, the Commission and most governments seemed to turn a blind eye to the devastating impacts that EU biofuels mandates have on food prices and land rights.

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“I’m happy the EC is finally recognising the fact that the use of food-crops for fuel is problematic,” says Ruth Kelly, Oxfam’s economic policy advisor and writer of Oxfam’s new report, “but putting a cap of 5 percent on biofuel consumption is ridiculous. At this moment the biofuel use in the EU is only at 4.5 percent. So the new cap of 5 percent is actually an increase of what we’re using at the moment.

G-20 comes up with an action plan to deal with food prices

On Thursday, the agricultural ministers of the world's 20 largest economies met to deal with surging food prices. While it is encouraging that there was discussion, the action plan they came up with falls short of what many advocates for the poor were hoping for.

From the Guardian, writer Mark Tran reports from the meetings in Paris.

The French agriculture minister, Bruno Le Maire, called agreement on a 24-page action plan unveiled in Paris as a "tour de force" and a victory against hunger in the world.

Analysts and campaigners were less enthusiastic at the outcome, which followed two days of talks in the French capital. "The plan of action tries to address the symptoms of price volatility on agricultural markets," said Olivier De Schutter, the UN special rapporteur on the right to food, "but it fails to address the causes."

De Schutter argued that food markets are highly dependent on energy markets, irresponsible mandates to increase the production and use of biofuels, and speculation that cannot be reduced to investors manipulating prices but which is the result of the "financialisation" of the commodities markets.

A key element of the action plan is a call for more transparency in commodity markets linked to an early warning system – an agricultural market information system – that would collect information on stocks, and the supply and demand of crops. Le Maire said India and China, which have been reluctant to provide such information on grounds of national security, would be given more time to come up the data.

The action plan encourages the private sector to come forward with this information, but there is no compulsion on big traders like Cargill and Bunge to release data, and they may be less than forthcoming on grounds of commercial sensitivity.

OXFAM says food prices will double by 2030

A new research paper from OXFAM has some very troubling forecasts for the future of world food prices. OXFAM predicts that food prices will more than double by the year 2030, which could reverse any gains made in human development. Prices for basic food staples hit another record high in April with no easing foreseen in their global demand.

From the Guardian, writer Felicity Lawrence tells us more about the OXFAM report on food prices.

After decades of steady decline in the number of hungry people around the world, the numbers are rapidly increasing as demand outpaces food production. The average growth rate in agricultural yields has almost halved since 1990 and is set to decline to a fraction of 1% in the next decade.

A devastating combination of factors – climate change, depleting natural resources, a global scramble for land and water, the rush to turn food into biofuels, a growing global population, and changing diets – have created the conditions for an increase in deep poverty.

"We are sleepwalking towards an age of avoidable crisis," Oxfam's chief executive, Barbara Stocking, said. "One in seven people on the planet go hungry every day despite the fact that the world is capable of feeding everyone. The food system must be overhauled."

Oxfam called on the prime minister, David Cameron, and other G20 leaders to agree new rules to govern food markets. It wants greater regulation of commodities markets to contain volatility in prices.

It said global food reserves must be urgently increased and western governments must end biofuels policies that divert food to fuel for cars.

G-20 finance minsters meeting concludes

The finance ministers of the G-20 wrapped up meetings in Washington over the weekend. As usual, the tension between what the powerful actually work on and what they should be working on was in full display.

The G-20 announced plans to review the policies of the biggest economies to make sure they are not making the world economy unstable. The biggest target will be the undervalued Chinese Yuan.

While the G-20 focused on this, advocates for the poor tried to make their voices heard to the finance ministers. Speaking out on how the policies of the rich nations have helped to increase food and fuel prices.

From the Inter Press Service, writer Kanya D'Almeida gives us the details on the World Bank and International Monetary Fund statements that concluded the meetings.

Following a few steps behind their biggest shareholders, the Development Committee – a forum of the Bank's and Fund's board of governors – held a press conference here Saturday to brief the public about the urgent need for "change", albeit in a framework that stays staunchly loyal to economic dogma.

Stressing the need for renewed focus on rising food prices and energy volatility, Development Committee chairman and Bahraini finance minister Mohammed Al Khalifa told the press that the World Bank Group "shared concerns over the world's most vulnerable populations" who were suffering the impacts of price hikes in basic foodstuffs and bearing the brunt of "overheating".

Echoing him, World Bank president Robert Zoellick warned that 44 million people have fallen into poverty as a result of rising food prices in 2011 alone.

"A further 10 percent rise in the food price index could put 10 million more into poverty this year," he said, adding, "In revolutionary moments, status quo is not the winning hand."

Officials of international financial institutions (IFIs) have this week reinforced their ability to jump on any bandwagon that offers quick profits, no matter how inconsistent their policies are with the real revolutionary changes unfolding across the globe.

Swarms of global organisations joined hands in the last week to protest the banks' decrepit policies, struggling to make their voices heard over the din of elites in "emerging markets" claiming a bigger stake in corporate-capitalism's pie.

Oxfam International's spokesperson Max Lawson said, "Leaders today claim the food crisis is desperately urgent, so urgent they will act on it at their next meeting in June - that's 66 days away. Nearly half a million children will have died of hunger by then."

Lawson added, "The World Bank says we're one shock away from a full- blown crisis but makes no mention of the three things rich countries have done to cause it – burning food for biofuels, gambling in commodity casinos, and subsidising farmers in rich countries."

World Bank says food prices have jumped 36 percent in a year

The World Bank has issued another warning about rising food prices. The Bank's latest analysis of food prices finds that they have have jumped 36% since April of last year.

That increase in food prices has pushed another 10 million people below the poverty line. For those who used to be on the edge of poverty any rise in food price could drop them below because a majority of their budget is spent on food. That percentage could be as much as 75% or more for a family that only makes one or two dollars a day.

From the Guardian, writer Phillip Inman gives us some of the details of the food price survey.

Food producing countries must relax export controls and divert production away from biofuels to prevent millions more people being driven into poverty by higher food prices, the head of the World Bank Robert Zoellick said in Washington.
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Higher transport and fertiliser costs have sent the price of wheat, maize and soya back to levels last seen in the price boom of 2008.

"More poor people are suffering and more people could become poor because of high and volatile food prices," Zoellick said. "We have to put food first and protect the poor and vulnerable, who spend most of their money on food."

He was speaking before the IMF and World Bank meetings later this week, which will be attended by finance ministers and central bankers including the chancellor of the exchequer, George Osborne, and Bank of England governor Mervyn King.

A further 10% increase in food prices could drive an additional 10 million people below the poverty line, while a repeat of the last year's increases would affect 34 million who are already close to the poverty line.

Some analysts have argued that a slowdown in global growth will bring food prices down from their recent peaks.

Goldman Sachs said in a recent note that oil prices would begin to drop, along with other commodities.

In recent days oil prices have slipped from a high of $127 to $120. But rival analysts remain concerned that oil prices will continue their long upward path, albeit with a few blips along the way.

The World Bank's food price index found that several key foods for developing countries shot up last year, including maize by 74% and wheat by 69%, though rice prices have been stable.

http://www.guardian.co.uk/business/2011/apr/14/food-price-inflation-world-bank-warning

Experts warn of more riots over high food prices

Food prices are at historic highs, yet the world is producing more food than ever before. A growing percentage of food is used for animal feed or for fueling care, with less going to hungry humans. Some experts warn that riots will occur again this year over the escalating food prices.

From the Inter Press Service, writer Thalif Deen receives this explanation of the problem.

The Rome-based Food and Agriculture Organisation (FAO) warned last week that world market prices for rice, wheat, sugar, barley and meat will remain high or register significant rises in 2011 - perhaps replicating the crisis of 2007-2008.

Rob Vos, director of development policy and analysis at the U.N.'s Department of Economic and Social Affairs (DESA), told IPS that higher food prices are already affecting many developing countries.

He said countries like India and a number of other East and South Asian countries are facing double-digit inflation, mainly caused by higher food prices - alongside higher energy prices.

In Bolivia, the higher prices for food in world markets recently forced the government to reduce consumer subsidies as these were running up the fiscal deficit too high.

The short-term implications are not only that the poor are especially heavily affected - and that more people could be pushed into poverty - but also that it will hamper the recovery in the countries facing higher inflation as consumers lose purchasing power, he noted.

Some central banks are moving to tighten monetary policy and governments are being forced to tighten fiscal policy, said Vos, who is also the U.N.'s chief economist.

Frederic Mousseau, policy director of the San Francisco- based Oakland Institute, told IPS that as early as last September, Mozambique experienced food riots over high bread prices.

Some 13 people were killed during a protest against the unaffordable price of bread, he told IPS.

"Food riots and civil unrest affected some 30 countries in 2008, and this can be repeated today since the situation has not changed in the last three years," said Mousseau, author of 'The High Food Price Challenge: A Review of Responses to Combat Hunger.' The most vulnerable countries are those which are the most dependent on food imports and the least able to handle high prices in international markets through public mechanism and public policy, he noted.

Farmland the size of Ireland could be used for EU bio-fuel requirement

The European Union is insisting that member countries increase the total consumption of bio-fuels to 10%.

The increase of food based bio-fuels will mean less food being grown for eating. Even if bio-fuel suppliers compensate for the lost land for human consumption it would need to clear more land to do it. Doing so would expel more emissions into the atmosphere as equipment makes the land suitable for farming.

A study from an environmental policy think tank shows just how much land will be taken away by the new bio-fuel policy, and how much emissions it will create. From the Guardian, writer John Vidal gives us the study details.

Plans to make European motorists use more biofuels could take an area the size of Ireland out of food production by 2020 and accelerate climate change, a study has found.

The report by the independent Institute for European Environmental Policy (IEEP) is based on plans that countries have submitted to the EU detailing how they intend to meet their legal requirement to include 10% of renewable energy in all transport fuels by 2020.

IEEP calculations suggest that the indirect effect of the switch will be to take between 4.1m and 6.9m hectares out of food production. In addition, say the authors, opening up land to compensate for the food taken out of production will lead to between 27m and 56m tonnes of additional CO² emissions, the equivalent of putting nearly 26m more cars on the road.

The study says European countries have chosen to meet the EU renewable energy targets by importing so-called first generation biofuels from African countries or from Indonesia and Brazil, rather than by promoting the use of advanced biofuels, electric vehicles or energy efficiency to reduce the environmental impact of transport.

"The renewable energy directive was adopted to help combat climate change, however, through promoting the use of conventional biofuels with no consideration of indirect land use change impacts it has the potential to actually increase the EU's greenhouse gas emissions.

Report says food prices to rise by 40 percent

A new joint report from the OECD and the United Nations says that food prices will continue to rise in the next decade. The report warns that prices will rise over 40 percent making investment into small farms even more important. The rising prices are attributed to bio-fuel production and the growing demand from developing countries.

From the Guardian, writer Katie Allen details what is in the report.

Farm commodity prices have fallen from their record peaks of two years ago but are set to pick up again and are unlikely to drop back to their average levels of the past decade, according to the annual joint report from Paris-based thinktank the OECD and the UN Food and Agriculture Organisation (FAO).

The forecasts are for wheat and coarse grain prices over the next 10 years to be between 15% and 40% higher in real terms, once adjusted for inflation, than their average levels during the 1997-2006 period, the decade before the price spike of 2007-08. Real prices for vegetable oils are expected to be more than 40% higher and dairy prices are projected to be between 16-45% higher. But rises in livestock prices are expected to be less marked, although world demand for meat is climbing faster than for other farm commodities on the back of rising wealth for some sections of the population in emerging economies.

Although the report sees production increasing to meet demand, it warns that recent price spikes and the economic crisis have contributed to a rise in hunger and food insecurity. About 1 billion people are now estimated to be undernourished, it said.

Fairtrade campaigners said the predictions of sharply rising prices provided a "stark warning" to international policymakers.
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Another factor driving up food prices is the controversial biofuels industry. The report predicts that continued expansion of biofuel output – often to meet government targets – will create additional demand for wheat, coarse grains, vegetable oils and sugar.

The EU defends bio-fuels policy

The anti-poverty head of the European Union refused to acknowledge that bio-fuels raised food prices to make millions more hungry. This claim was made despite a mountain of evidence to the contrary.

The EUs commissioner for development aid Andris Piebalgs issued a position paper published on April 21st. In it, Piebalgs defends the EU's policy of using food for energy. Piebalgs formerly served as the EUs Energy Commissioner.

From the IPS, writer David Cronin reveals more from the paper and the reaction to it.

"I can clearly state today that biofuel policy has done no damage in the developing world," Piebalgs told IPS. "The focus is right."

Holding the energy portfolio in the European Commission from 2004 until last year, Piebalgs was one of the most zealous defenders of an EU strategy that at least 10 percent of all journeys undertaken on the bloc's roads by 2020 should be powered by biofuels.

Since that goal was set in 2007, it has encountered stiff opposition from environmental campaigners and food policy analysts. The World Food Programme has held the greater use of biofuels at least partly responsible for a spike in the prices of basic groceries that has pushed the number of people who suffer from chronic hunger and malnutrition beyond a billion. Food crops used for cars and trucks include wheat, maize, soy, sugar and palm oil.

Piebalgs' stance contrasts with the findings of several studies undertaken at the Commission's request. An environmental impact assessment on the EU's biofuels policy issued last month cast doubts on whether it will help slow down the pace of climate change. The assessment calculated that raising the proportion of biofuels used for road transport above 5 percent in the next decade would do more harm than good to the global environment as many forests would be sacrificed to create room for biofuel plantations.

The Commission has so far refused to make public a series of other documents relating to the biofuels target.

"Evidence is building that the EU's biofuels policy is leading to the destruction of forests and rural areas, as well as pushing up food prices," said Adrian Bebb from Friends of the Earth. "It is crystal clear that the EU's policy on biofuels is not sustainable and it is only a matter of time before the EU needs to change that policy. Quite clearly, though, some commissioners are still in denial."

Earlier this year ActionAid predicted that an additional 600 million people would join the ranks of the world's hungry by 2020 unless the EU scraps its biofuels target. Anne Catherine Claude, a campaigner with the organisation, said that Piebalgs is "probably afraid" of admitting the impact of biofuels because he does not wish to upset the large energy and agribusiness companies who have a vested interest in keeping the target. The Union's objective was originally set after EU officials consulted an advisory panel comprising representatives of such firms as Shell, Abengoa, Total, British Sugar, Nestlé and Volvo.

Clinton praises Bush on food aid

On World Food Day that was held on October 16th, former US President Bill Clinton admitted getting the issue of food security for poor nations wrong.

A lot of aid that goes into poor countries is food. But that makes it even harder for the small farmers of poor countries to stay profitable. In recent years, imports of food to poor nations rose, making them even more dependent on aid. If aid was ever removed, God forbid, the poor nations would be unable to sustain themselves.

Former President Clinton actually praised our current President Bush for getting food security right, but he has been stopped by politics in the US. In this Associated Press article, writer Charles Hanley has quotes from President Clinton on improving aid effectiveness to the developing world.

Former President Clinton told a U.N. gathering Thursday that the global food crisis shows 'we all blew it, including me,' by treating food crops 'like color TVs' instead of as a vital commodity for the world's poor.

Addressing a high-level event marking Oct. 16's World Food Day, Clinton also saluted President Bush _ 'one thing he got right' _ for pushing to change U.S. food aid policy. He scolded the bipartisan coalition in Congress that killed the idea of making some aid donations in cash rather than in food.

Clinton criticized decades of policymaking by the World Bank, the International Monetary Fund and others, encouraged by the U.S., that pressured Africans in particular into dropping government subsidies for fertilizer, improved seed and other farm inputs as a requirement to get aid. Africa's food self-sufficiency declined and food imports rose.

Now skyrocketing prices in the international grain trade _ on average more than doubling between 2006 and early 2008 _ have pushed many in poor countries deeper into poverty.

'Food is not a commodity like others,' Clinton said. 'We should go back to a policy of maximum food self-sufficiency. It is crazy for us to think we can develop countries around the world without increasing their ability to feed themselves.'

He noted that food aid from wealthy nations could itself be a tool for bolstering agriculture in poor countries. Canada, for example, requires that 50 percent of its aid go as cash _ not as Canadian grain _ to buy crops grown locally in Africa and other recipient countries.

U.S. law, however, requires that almost all U.S. aid be American-grown food, which benefits U.S. farmers but undercuts local food crops. Bush proposed earlier this year that 25 percent of future U.S. aid be given in cash.

'A bipartisan coalition (in Congress) defeated him,' Clinton said. 'He was right and both parties that defeated him were wrong.'

Clinton also criticized the heavy U.S. reliance on corn to produce ethanol, which increased demand for the crop and helped drive up grain prices worldwide.

UN Report: Bio-Fuels Adding to Food Crisis

from the Voice of America

By Lisa Schlein

The U.N. Special Investigator on the Right To Food says soaring food prices have declined somewhat, but the crisis remains and the problems are exacerbated by the production of bio-fuels. The expert submitted a report to the U.N. Human Rights Council as a follow-up to the Special Session convened on the Global Food Crisis in May. Lisa Schlein reports for VOA from the conference in Geneva.

The Special Session in May was called to deal with the negative impact of soaring food prices on the world's poor. U.N. Investigator on the Right To Food, Olivier De Schutter, says the concerns people had then still remain.

He says prices of food commodities in international markets have decreased from their peak levels of last spring. But, he notes they remain much higher than they were before the crisis and predictions indicate they will remain high for several years.

"Before the crisis, it was estimated by the FAO [Food and Agriculture Organization] that 854 million people were hungry in the world, not receiving sufficient calorie intake per day," he said. "And, two billion were malnourished. As a result of the crisis, it is estimated that at least 50 million more people have grown hungry. And, it is estimated that probably 100 million more people have fallen into extreme poverty."

De Schutter says the poor are hungry and malnourished not because there is no food, but because they cannot afford to buy the food that is available. He says governments must take steps to protect their people from the emerging threats to the right to adequate food.

For example, he says they must protect land users from the risk of eviction, provide their poor with social safety nets and make sure rural women have the same rights as men to access land and other productive resources.

The report notes speculation in the futures market of primary agricultural commodities is behind much of the volatility in food prices. It suggests measures be adopted to decrease the resulting vulnerability, particularly for net food importing developing countries.

The report says the whole issue of agro-fuels has to be rethought. It says there is growing evidence that many agro-fuels consume too much fertile land, use massive amounts of water and energy and, therefore, are not a long-term alternative to fossil fuels.

De Schutter says with the possible exception of sugarcane in countries such as Brazil, the environmental impact of other agro-fuels currently produced from food crops is not particularly positive.

"I am not opposed as a matter of principle to agro-fuels," he said. "Although, I think their environmental benefits in many cases have been widely overestimated. And, I believe particularly bio-fuels produced from maize as is the case in the U.S. is quite detrimental to the environment. But, having said this, I am not excluding in the future that agro-fuels may continue to be produced, but there needs to be some form of international discipline imposed on States."

Link to full article. May expire in future.

EU committee votes to scale back biofuels target

from the Daily Press

By CONSTANT BRAND

BRUSSELS, Belgium - EU lawmakers voted Thursday to cut in half an ambitious target for using crop-based biofuels for 10 percent of its road transport needs by 2020.

The vote by the European Parliament's industry committee deals a blow to climate change goals agreed to by EU leaders last year to try to cut carbon dioxide emissions.

Environmental and aid groups had criticized the EU's 10 percent biofuels target, claiming it harmed efforts to fight global poverty and effectively tackle carbon emissions, and caused deforestation.

The biofuels target is part of an ambitious climate change package the 27 EU leaders embraced last year, which they hope to enact by year's end.

The overall aim is for the EU to draw 20 percent of all its energy from renewable sources by 2020 — up from 8.5 percent now.

Lawmakers pushed EU governments to move away from so-called first generation biofuels, which use food crops to make transport fuels, and instead use more alternative green technologies such as electric and hydrogen powered vehicles.

An amended climate change bill now goes to the full European Parliament for a vote and back to EU governments for further negotiations. EU governments and the EU assembly all have to agree on the climate change plan before it becomes law.

France, which currently holds the EU presidency, wants the legislative measures in place before international climate change talks in December.

The European Commission, which drafted the original climate change bill, had steadfastly ignored critics who said the 10 percent biofuels target contributed to rising food prices.

Link to full article. May expire in future.

World Bank says biofuels major diver of food prices.

from Reuters

You don't say? :sarcasm: - Kale
By Lesley Wroughton

WASHINGTON - Large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices, a top World Bank economist said in research published on Monday.

World Bank economist, Don Mitchell, concluded that biofuels and related low grain inventories, speculative activity, and food export bans pushed prices up by 70 percent to 75 percent.

The remaining 25 percent to 30 percent was due to a weaker U.S. dollar, higher energy costs and related rises in fertilizer and transport costs, he wrote.

An unfinished version of the research that surfaced in news stories sparked a heated debate earlier in July, with trade groups for the ethanol industry calling the 75 percent figure "a stretch" and others saying it confirmed the dangers of current biofuels policies.

The outcome of Mitchell's research is controversial because it goes beyond most other estimates for the impact of biofuels on rising food prices.

Still, its research corresponds somewhat with the International Monetary Fund, which estimated in May that biofuels accounted for 70 percent of the increase in maize prices and 40 percent in soybean prices.

Meanwhile, the Bush Administration has estimated that biofuel production pushed food prices higher by 2 to 3 percent. Hoping to wean the country off foreign oil, Washington has boosted incentives and mandates for alternative fuels made from food crop.

But Mitchell said without the increase in biofuels production, global wheat and maize stocks would not have declined, oilseed prices would not tripled and price increases due to other factors, such as drought, would have been more moderate.

Also, food export bans by countries trying to preserve food supplies and speculative activities would not have occurred because they were responding to rising prices.

"The large increases in biofuels production in the U.S. and EU were supported by subsidies, mandates, and tariffs on imports," Mitchell said in the research that looks at rapid rises in food prices since 2002. "Without these policies, biofuels production would have been lower and food commodity price increases would have been smaller," he added.

A widely respected agricultural economist, Mitchell said biofuels policies that encourage subsidized production need to be re-thought because they're hurting poor countries.

He said the increase in grain consumption in developing countries was moderate and did not lead to the large price increases.

Growth in global grain consumption, excluding biofuels, was only 1.7 percent a year from 2000 to 2007, while yields grew by 1.3 percent and area grew by 0.4 percent, which would have kept global demand and supply roughly in balance, he said.

The United States is the largest producer of ethanol from maize and is expected to use about 81 million tons for ethanol in the 2007/08 crop year. Meanwhile, Canada, China and the European Union used roughly 5 million tons of maize, which was about 11 percent of the global maize crop.

The use of maize for ethanol in the United States has global implications because the U.S. produces about one-third of the world's maize and two-thirds of global exports, and used 25 percent of its production for ethanol in 2007/08.

Link to full article. May expire in future.