World's hungry could be worst hit by biofuel boom

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World's hungry could be worst hit by biofuel boom
By Philip Brasher
pbrasher@dmreg.com

WASHINGTON — America's appetite for fuel ethanol could take food away
from some of the world's poorest people.

The price of corn and other crops is soaring because of the demand for
grain to make ethanol, a gasoline additive, and that means the
government's budget won't buy as much food as it used to. The price of
corn alone, a key food in Africa, has more than doubled in the past year.

The pinch is already being felt.

Catholic Relief Services, one of several organizations that distribute
U.S.-donated food in Africa and Latin America, expects to deliver
161,000 tons this year, down from 200,000 tons last year.

"In the long run, it means that we are fueling our cars with food that
people might have eaten. There are important trade-offs," said Lisa
Kuennen-Asfaw, director of public resources for the Baltimore-based group.

HISTORY A POOR GUIDE

Congress could increase funding for food aid to make up for the higher
commodity prices. But if history is a guide, that likely won't happen.

Americans, and especially American farmers, take pride in feeding the
world's hungry, but the truth is that the government's food-aid programs
historically have at least as much to do with helping U.S. agribusiness
interests as helping the poor.

The last time there was a similar surge in commodity prices - in the
mid-1990s - government food purchases fell sharply but rebounded when
global commodity prices collapsed a few years later.

Purchases fell more than 40 percent from 1994 to 1996 but shot from 3.5
million to 10 million tons from 1998 to 1999. Since then, the volume of
food has varied but the overall budget has been relatively flat, and
that worries aid organizations.

"If food prices are 20 percent higher, that means you get 20 percent
less food," said Gawain Kripke of Oxfam America, a development group.

Look for farm-state lawmakers to argue that the rise in commodity prices
isn't such a bad thing for poor countries.

After all, critics of U.S. food aid programs have long argued that the
donations can sometimes drive down the prices paid to local farmers in
regions where the commodities are distributed.

"One of the things that could happen is that with prices going up
overall that could encourage agriculture in these countries," said Rep.
Collin Peterson, the Minnesota Democrat who now chairs the House
Agriculture Committee.

That's true, but the higher commodity prices won't be much help in the
poorest countries, where farmers often can grow only enough food to feed
their families, according to aid groups.

LITTLE SIGN OF LETTING UP

Meanwhile, there's little sign that the surge in the ethanol industry is
letting up. The industry is on track to add 6 billion gallons of
production - more than twice the current capacity - and Congress is
considering new incentives to increase production.

The Earth Policy Institute, an environmental think tank, recently warned
that the ethanol industry will be consuming 5.5 billion bushels of corn
a year, more than half of what was produced nationwide in 2006, if the
recent pace of construction starts continues into this year.

The biofuels boom isn't limited to the United States. Europe is ramping
up production of biodiesel from vegetable oils to reduce the use of
petroleum and cut greenhouse gas emissions.

"It's very clear that we need to work on environmental and conservation
issues and other kinds of concerns that affect the American public,"
said Kuennen-Asfaw, referring to the potential benefits of alternative
energy sources. "But we also have to think about the direction we're
going in for poor people around the world."
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