International Food Policy Council: Biofuels Responsible For 1/4 – 1/3 Of The Spike In Food Prices
Biofuels aren’t the only problem with the global food market, but they are a big problem:
The International Food Policy Research Institute estimates that biofuel production accounts for between one-quarter and one-third of the recent spike in global commodity prices.
For the first time in 30 years, food riots are breaking out in many parts of the globe, including major countries such as Mexico, Pakistan and Indonesia.
The fact that America’s energy policies are creating global instability should concern the leaders of both political parties.
Restraining the dangerous effects of artificially inflated demand for ethanol should be an issue that unites both conservatives and progressives.
As a recent Time cover story pointed out, biofuel mandates increase greenhouse gasses and create incentives for global deforestation.
In the Amazon basin, huge swaths of forest are being cleared to meet the growing hunger for biofuels.
In terms of the food prices problem we might be able to offset some of the damage biofuels have done by ending a lot of the protectionism that goes on in the international food market as Tyler Cowen suggests in yesterday’s New York Times. After all, less rigid trade policies allow markets to bend to meet supply shortages and demand increases. But doing that will do nothing to stem the rising demand for biofuels which is being driven almost exclusively by government subsidies and mandates.
I, and those who feel as I do about free markets, have long warned that government shoving biofuels down the collective throats of citizens was going to result in some serious unintended consequences. Those consequences are now manifesting themselves, and while the blame can’t be put entirely at the feet of biofuels there is absolutely no denying that biofuels are exacerbating an already bad situation.
