http://en.epochtimes.com/news/7-10-15/60796.html

Food Prices Driven by Biofuels

By Diane Cordemans Epoch Times Hamilton Staff

Oct 15, 2007

 

Food prices are set to rise as land is increasingly diverted to crops for biofuel production, says Keith Woodford, Professor of Farm Management and Agribusiness at Lincoln University, Canterbury.

He said global prices for grains and meat continue to rise as more countries look to biofuels to produce renewable energy.

International grain prices have doubled in the last 18 months - largely because one quarter of the United States' corn crop has been converted to biomass production, Professor Woodford said.

New Zealand farmers could benefit through this transition period, gaining higher prices for dairy and beef products as other countries target biofuel crops, he said.

"The effects of biofuels will go far beyond agriculture - they will extend to the supermarket. Anything that makes use of grain is going to become more expensive, including chicken, pork and beef."

He said it would probably be 6-12 months before prices in New Zealand would be affected.

The Green Party was concerned about the effect the Biofuel Bill would have on New Zealand's food supply.

Co-leader Jeannette Fitzsimons announced the negotiation of an amendment to the bill last week, to ensure that biofuel production in New Zealand does not impact the food supply or the environment.

"We are also deeply concerned at the use of food grains such as corn to make ethanol. This is already forcing up the price of food in poor countries and will lead to even worse starvation in Africa," she said.

"In the end, there is a limit to how much one limited resource, oil, can be replaced by another, namely high quality food-producing land," she said in a press release.

Tallow and whey are low-cost sustainable sources of biofuels in New Zealand, while cellulosic ethanol (from willow trees) and biodiesel from algae grown on sewage ponds are also being researched.

"However, in a competitive market, the motor vehicles of the developed countries will always be able to outbid the stomachs of the poor," Ms Fitzsimons said.

The rush to reduce the world´s reliance on oil has seen many countries introduce programmes to encourage biofuel production, adding to greenhouse gas emissions, environmental damage, and increasing food prices.

A report from the Organisation for Economic Cooperation and Development (OECD) said biofuels may "offer a cure that is worse than the disease they seek to heal".

United Nations special Rapporteur on the Right to Food, Jan Ziegler, has warned that hundreds of thousands of people could die from starvation if sugar and maize production is diverted to biofuels.

He has accused the European Union, Japan and the United Status of "total hypocrisy" for promoting biofuels to cut their dependency on imported fuels.

The United Nations said in a report that biofuels are more effective when used for heating and electricity, than fueling vehicles. Gull Petroleum has been offering New Zealand motorists a biofuel-petrol since August this year. The ethanol is sourced from whey, a natural by-product of the dairy industry.

Dairy giant Fonterra have found it more profitable to sell lactose derivatives from whey than other sources because New Zealand's ethanol supplies are limited.

Lanzafuels Biofuels New Zealand also decided against using locally grown maize in their biofuel plant. They said it was more economical to import ethanol from countries like Brazil than to produce it locally.

Lanzafuels had been considering converting New Zealand sheep and beef farms to biofuel crops, until they found more cost effective alternatives.

Taxpayers in the United States and the European Union are already subsidising biofuels. In the United Status this year, taxpayer subsidies have reached US$5.1 billion.

The OECD is encouraging its members to lower their import tariffs to allow biofuel production to develop in countries with more suitable climates.

The OECD is also encouraging governments to reduce demand for gasoline rather than encourage the demand for biofuels.

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