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‘Sides’ Square off in Biofuels Debate

May 20th, 2008 @ 9:28 am

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Tags: Archer Daniels Midland Co., Food, Biofuel, Food & Beverage, Manufacturing, Dan Mitchell

“Go ahead,” says the headline of an essay in BusinessWeek, “blame biofuels” for rising food prices.

But the article itself says: “Apparently the problem has multiple causes.”

Oh! Apparently, some of those causes are higher fuels costs, rising worldwide demand for meat, speculation in commodities markets, and the weather, allows Rachel Smolker, a researcher and “campaigner” with the Global Justice Ecology Project and the Global Forest Coalition, who wrote the essay.

So, can we “go ahead, blame biofuels,” or not? “Unfortunately, the price of food is now bound more closely than ever to fossil fuel and biofuel markets, making it unaffordable for much of the human population,” Smolker vaguely writes.

She goes on to list all the evidence for biofuels’ effect on food prices: Ethanol’s profitability, the increasing amount of land devoted to biofuel crops, the profits of big biofuel producers like Archer Daniels Midland and Cargill.

Still, she never quite makes the case that we can outright “blame biofuels” for food prices, because it’s effectively impossible, here in the thick of the food crisis, to quantify how big an effect they have had relative to the other factors that she noted – fuel costs, speculation, and the rest. Of course we can blame biofuels, but we can blame all those other causes, too.

Out of a sense “fairness,” I suppose, BusinessWeek also published a counterpoint to Smolker’s point. Titled “What’s Right with Biofuels,” it was written by John Plaza, president and interim CEO of Imperium Renewables, which makes technology for refining and manufacturing biodiesel fuel.

He allows that “it’s true that biofuels have also played some role in increasing food prices.” But he notes, correctly, that he has “yet to see a definitive study that examines that impact” relative to other factors.

He complains, rightly, about the anti-biofuels crowd’s tendency to ignore or gloss over the fact that the market is moving away from food crops like corn and more into sources like switchgrass and agricultural waste, which eventually will help take pricing pressure off of food. But he doesn’t note that, to some degree, the land devoted to growing crops for biofuels will compete with land devoted to growing food. And in any case, the argument seems irrelevant to the immediate crisis.

He also doesn’t mention the ridiculous government biofuel policies — subsidies, mandated production, protectionism — that have gotten us into this mess while benefiting companies like his.

Point-counterpoint may be entertaining, but it’s not much help when you really want to understand something.

Dan Mitchell has spent the past 20 years writing and editing for outlets such as the Chicago Tribune, the Minneapolis Star-Tribune, National Public Radio, Business 2.0, and Wired.

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Dan Mitchell

Dan Mitchell has spent the past 20 years writing and editing for newspapers, magazines, and Web publications. Currently, he writes the What's Online column for the Saturday business section of the New York Times. He has also written for the Chicago Tribune, the Minneapolis Star-Tribune, National Public Radio, Business 2.0, and Wired. more »

AboutFood Industry

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