The impact of the rising biofuels market on global food prices is much worse than predicted. According to an as yet unpublished study commissioned by the World Bank, biofuels have caused food prices to rise 75%.
The World Bank completed the study, which has been leaked by the Guardian, at the end of April but has yet to publish it, presumably in deference to Bush’s gung-ho corn ethanol campaign. Another damning study by the British government, due out soon, states that biofuels have “played a significant part in pushing up food prices.”
"Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises," said Robert Bailey, policy adviser at Oxfam. "It is imperative that we have the full picture. While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat."
Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt. Government ministers here have described higher food and fuel prices as "the first real economic crisis of globalisation".
President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that: "Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases."
Even successive droughts in Australia, calculates the report, have had a marginal impact. Instead, it argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices.
Say you were able to cultivate every acre of Illinois for corn-based ethanol. This is purely hypothetical as it would involve bulldozing Chicago and other cities and towns in the Prairie State. As an Illinois resident surrounded by cornfields, fleeing demolition is not my relocation fantasy.
One of the potentially most productive corn-growing states on the planet would yield about 5.7 billion bushels of corn and 16 billion gallons of ethanol, according to Charles Washburn, professor emeritus at California State University. He has researched the subject over the past 45 years.
The Illinois mega-crop would provide only 0.8 percent of annual U.S. gasoline and diesel-fuel use, Washburn estimates, subtracting the energy it takes to create ethanol.
Of course, U.S. energy consumption isn’t a static beast. Washburn further projects that “a new corn field the size of Illinois would be required to meet our transportation energy growth every seven months.”