Anyhow, I had read predictions that increased use of ethanol would have a powerful effect on the price of food, but I never expected it to happen so quickly. I’ve also been surprised to see that the business section of my morning paper has been covering the story so well. I don’t have the time or expertise to blog this issue properly, so I’ll post a few bits (emphasis mine) and encourage you to do your own follow up. Unless you have more important things to think about than food and energy.
* This month, the Organization for Economic Co-operation and Development said higher demand for biofuels is causing “fundamental changes” to agricultural markets that could drive up prices.
They see “structural changes” under way that could well keep prices for many agricultural products higher over the coming decade.
“We haven’t seen anything on this scale before,” Martin von Lampe, an agricultural economist in Paris at the Organization for Economic Co-operation and Development, told Bloomberg News.
Net food importing countries, as well as the urban poor, will likely be hardest hit, the OECD predicts. — Ethanol fuels global run-up in food prices
* “Ethanol indeed is too costly to be pursuing, which is why North American ethanol producers receive billions in subsidies. The fuel would not exist without the handouts. Now another cost has to be factored into the equation as ethanol production soars — the cost of the diverted land. More fuel crops mean less food crops. There is no doubt commodity food prices are rising and that agricultural land diversion is at least partly to blame. The ethanol lobby argues that higher commodity prices (which are still low by historic standards) are good news for farmers and non-industrial countries. Perhaps, but what about everyone else? Most consumers aren’t farmers.” – The ethanol boom
* “Several American scientists have concluded ethanol does nothing good for the planet. They measured the amount of energy used in the entire production cycle, from growing the corn crop to delivering the ethanol by truck to a fueling station, and found that producing a litre of ethanol can require as much, or more, energy than the amount of energy released when it’s burned (ethanol producers say the studies use the wrong inputs). If this is true, burning ethanol will not slow global warming. Also note that ethanol has a lower energy, or heat, content than the equivalent amount of gasoline or diesel fuel. In other words, you have to burn more of it to cover the same distance.” – – The ethanol boom
* Too much biofuel is coming to the market too quickly and the casualties might be the poor who can’t afford the sharply rising food prices. — What good is green if the poor go hungry?
* Mexico is in the grip of the worst tortilla crisis in its modern history. Dramatically rising international corn prices, spurred by demand for the grain-based fuel ethanol, have led to expensive tortillas. That, in turn, has led to lower sales for vendors such as Rosales and angry protests by consumers.
Tortilla prices have tripled or quadrupled in some parts of Mexico since last summer. On Jan. 18, Calderón announced an agreement with business leaders capping tortilla prices at 78 cents per kilogram, or 2.2 pounds, less than half the highest reported prices. The president’s move was a throwback to a previous era when Mexico controlled prices — the government subsidized tortillas until 1999, at which point cheap corn imports were rising under the NAFTA trade agreement. It was also a surprise given his carefully crafted image as an avowed supporter of free trade.
…In another place, a rise in the cost of a single food product might not set off a tidal wave of discontent. But Mexico is different.
“When you talk about Mexico, when you talk about culture and societal roots, when you talk about the economy, you talk about the tortilla,” said Lorenzo Mejía, president of a tortilla makers trade group. “Everything revolves around the tortilla.”
The ancient Mayans believed they were created by gods who mixed their blood with ground corn. They called themselves “Children of the Corn,” a phrase Mexicans still sometimes use to describe themselves.
Poor Mexicans get more than 40 percent of their protein from tortillas, according to Amanda Gálvez, a nutrition expert at the National Autonomous University of Mexico. Modern-day tortilla makers such as Rosales use “an ancient and absolutely wise” Mayan process called “nixtamalizacion,” Gálvez said.
…Gálvez said she believes the price increase is already steering Mexicans toward less nutritious foods. The typical Mexican family of four consumes about one kilo — 2.2 pounds — of tortillas each day. In some areas of Mexico, the price per kilo has risen from 63 cents a year ago to between $1.36 and $1.81 earlier this month.
With a minimum wage of $4.60 a day, Mexican families with one wage earner have been faced in recent months with the choice of having to spend as much as a third of their income on tortillas — or eating less or switching to cheaper alternatives.
Many poor Mexicans, Gálvez said, have been substituting cheap instant noodles, which often sell for as little as 27 cents a cup and are loaded with less nutritious starch and sodium.
“In the short term, the people who can buy food are going to get fatter,” she said. “For the poor, the effect is going to be hunger.” — A Culinary and Cultural Staple in Crisis
