Corn based Ethanol and Biofuels Can Help Alleviate World Hunger
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 Seed Newsvine |
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It is easy to assume that when grain prices rise by 30% in a year widespread hunger and starvation will ensue. It is also an incorrect assumption, or at least a naïve assumption. It ignores four critical factors: the distinction between hunger and starvation, where hunger issues are most prominent; why it is so persistent; and finally, who is complaining.
There is a definite distinction between causes for famine/starvation and general hunger issues. Famine and starvation issues are short term phenomena brought on by natural causes (drought and crop failure) or by manmade causes (wars or direct policies to starve political opposition). Tragically, a survey of recent past famines has generally shown food supplies to be available but withheld because of politics. This is a separate issue from persistent hunger, which results from overall poverty and an inability of peasants to buy adequate food. The famous “Green Revolution” of the late 1960s and 1970s changed the dynamic of hunger from a supply question to a distribution question. The problem is not that there is no food available but that the poorest populations simply cannot afford to buy it. Hunger is in the countryside, complaining is done in the cities. Peasant hunger results from food prices kept low in order to provide urban populations with cheaper food. Because the food producing peasants cannot make enough money selling their grain, they cannot in turn afford an adequate diet. Persistent hunger is a poverty issue, not a supply issue! The rise in grain prices can actually help the poorest farmers in the world by raising their income!
Complaining occurs in urban areas (or at least that’s where we hear it most loudly). The rise in food prices is benefiting farmers at the expense of city dwellers. The poorest people in the world are the farmers who do not have the same connection to media attention so when they complain about low grain prices, few hear about it. Now that the price issue has shifted it grabs the world attention because reporters live in the cities and one can go to a market and easily record the rising prices.
Finally, the forecasts about grain price levels well into the future are ignoring basic economic forces. High grain prices provide an incentive for greater production. It is mistaken to assume that the world is at maximum agricultural production levels. It is also mistaken to assume that taking production from the food column and moving it to the non-food column directly causes hunger. Hunger results from poverty, not a lack of supply.
Agricultural economic policies deal with a constant struggle between cheap food for urban populations and adequate income for farmers and peasants. The whole issue about biofuel production is a wealth distribution question. It is not causing more hunger! Grain price increases cause money to move from consumers to producers so it is causing louder complaining among consumers and shifting food cost issues from one group to another. Food producers are finally seeing the economic pendulum shift in their direction and this is what the controversy is all about!
Whether third world farmers will actually be able to capitalize on the higher grain prices is a separate question that is not directly linked to the use of grain for ethanol. It is linked more to how well poor farmers are tied to the world food market and whether they can actually receive the same bushel price that the Chicago commodity market says they should receive. That this is often not the case is a political issue, not one caused by biofuel production.
*FAO: The United Nations Food and Agriculture Organization.
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