After decades of relative stability, global food prices increased dramatically between 2005 and 2008. Various environmental groups blamed the crisis on heightened international demand for biofuels. After all, grain prices were the first to increase, and some varieties of biofuel are produced from grains. In the future, further development could further divert agricultural production away from food crops, with biofuels cultivation programmes competing over rural investment, infrastructure, water, fertilisers, and skilled labour.
Upon closer inspection, this argument begins to fall apart. Firstly, as the World Bank has acknowledged, biofuels only account for about 1.5% of the total global area under grains and oilseeds; which ‘raises serious doubts about claims that biofuels account for a big shift in global demand’. Maize prices hardly moved during the first period of increase in US ethanol production, while oilseed prices actually dropped when the EU began to increase biodiesel production. When prices spiked, ethanol and biodiesel production had actually begun to slow down in the US and EU.
Secondly, in relation to rising food prices; although maize and wheat prices were amongst the first to increase, so was that of rice – a grain completely unrelated to biofuels production. This could only have been caused by a melange of other factors, such as rising oil prices, low grain stocks, large land-use shifts, speculative activity, export bans, a weakening dollar, and changing eating habits. In a debate so complex, it is impossible to isolate one factor as primarily responsible, and all the evidence suggests that biofuels have played at the most a minor part in recent increases.
Who’s Fooling Whom? The Real Drivers Behind the 2010/11 Food Crisis in Sub-Saharan Africa
The purpose of this report is to examine the link between global demand for biofuels and the 2010/11 food crisis in the Sub-Saharan African region, and to understand to what extent the former has influenced the latter.