Food Shortages
In Haiti, four people were killed in early April, 2008 in protests last week over a 50 percent rise in the cost of food staples in the past year. From Egypt to Vietnam, price rises of 40 percent or more for rice, wheat, and corn are stirring unrest and forcing governments to take drastic steps, such as blocking grain exports and arresting farmers who hoard surpluses.
The UN International Fund for Agriculture predicts food riots will become common on the world scene for at least a year. The World Bank says 33 countries face unrest from higher prices in both food and energy.
Food Shortage vs. Energy Production
A government’s attempt to control food markets, either for farmers or for urban dwellers, often creates the kind of distortions that contribute to higher prices. One of the worst examples is a rush by Europe and the US to devote more farmland to growing biofuels – a dubious action to curb greenhouse gases. In 2008, about 18 percent of grain in the US will go to make ethanol and, according to the Earth Policy Institute, such production over the past two years could have fed nearly 250 million people.
Food vs. Energy
The UN says it takes 232kg of corn to fill a 50-litre car tank with ethanol. That is enough to feed a child for a year. Last week, the UN predicted “massacres” unless the biofuel policy is halted.
We are all part of this drama whether we fill up with petrol or ethanol. The substitution effect across global markets makes the two morally identical.
