Farm Progress

• Predictably, a disproportionate focus in the lead-up to the G20 meeting has been on biofuels.

June 20, 2011

3 Min Read

Agricultural heads of the G20 nations are set to meet this week in Paris in an attempt to address rising food prices and food insecurity in developing nations.

Predictably, a disproportionate focus in the lead-up to the meeting has been on biofuels.

A June 2, 2011, report from a group of international organizations put much of the blame for volatile world food prices on the back of biofuel production and largely ignored the role of global oil prices and market speculation.

“It may be vogue for certain groups to blame biofuels for global hunger issues as though they didn’t exist before biofuel production, but that doesn’t mean eliminating biofuels policies will somehow put more food on the plates in developing nations,” said Renewable Fuels Association Vice-President for Research and Analysis Geoff Cooper.

“Exorbitant oil prices, excessive speculation in commodities markets, recent weather events, and host of other issues all play more significant roles in determining the price and availability of food than does biofuel production. As numerous reports have noted, bioenergy production can provide the catalyst many nations need to invest in agricultural technology, thus improving productivity, food security and their own energy stability.”

“Because the report is incomplete and unbalanced, we encourage G20 leaders to reject its findings and request a revision that takes into account the available literature on the impact of biofuels on world food prices, the broader range of factors contributing to food price volatility, and comments from stakeholders,” Cooper said.

Report full of holes

Responding specifically to the June 2 report, Cooper noted in this blog post that the analysis included in the report was full of holes and contradictory to previous reports from some organizations within the group submitting the report.

“Most glaringly, this report fails to recommend concrete steps that could be taken by G20 countries to combat the impact of higher energy costs on food price volatility,” Cooper wrote. “Remarkably, the report fails to properly address the impact of prices for oil and other energy sources on food price volatility.”

Cooper notes that a Texas A&M study conducted during the last rise in world food prices in 2008 found, “The underlying force driving changes in the agricultural industry, along with the economy as a whole, is overall higher energy costs, evidenced by $100 per barrel oil.”

On the issue of market speculation, Cooper points to a World Bank report in 2010 that stated “…the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors (the so-called “financialization of commodities”) may have been partly responsible for the 2007/08 spike.”

The World Bank is part of the group of organizations submitting their report to the G20 in which they fail to provide any policy response to non-commercial speculation in the market. 
Finally, Cooper notes that recommendations to abandon biofuel productions are shortsighted and ignore the contributions that such technologies can offer.

In May 2011, officials involved in the Global Bioenergy Partnership (which includes many of the organizations responsible for the June 2 report) stated that “Modern bioenergy encompasses many technologies that have the potential to not only promote sustainable development, but also help meet two important needs in the developing world by enhancing food and energy security.”

“The report correctly recognizes that food price volatility has many complex and inter-related causes,” Cooper wrote. “However, the authors unfortunately focus disproportionately on biofuels and fall short in providing actionable recommendations to address many of these more serious factors.”

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