36 red pepper oct/nov2007 What has climate change got to do with the price of bread? Quite a lot, it seems, if Britain’s biggest food producer is to be believed. In early September, Premier Foods – the makers of Hovis and Mothers Pride – announced an 8p per loaf price hike, the second increase this year. Robert Schofield, the company’s chief executive, blamed an increase in ‘agrofuel’ (also referred to as ‘biofuel’) production: ‘As long as governments are going to grow fuel, there will be, in effect, an environment tax on food.’ There is more than a grain of truth to this. With the EU and its member states incentivising the growth of agrofuels, big money is pouring into this sector – with venture capitalists, major agribusiness and oil companies all standing to gain from recent price hikes. Earlier this month, global wheat prices hit a new record high of $8 per bushel on the Chicago exchange, which provides the global benchmark. Coupled with the unpredictability of recent harvests – itself a symptom of climate change – and increased demand from China and India, the push for agrofuels has already contributed to a 25year low in global wheat stocks, forcing up the price. Other staple crops are affected by similar trends, dubbed ‘agflation’ by economists. And while agrofuel production is not the only factor in these price increases, it is a major one. According to the recent OECD-FAO Agricultural Outlook 20072016, ‘Increased demand for bio-fuels is causing fundamental changes to agricultural markets that could drive up world prices for many farm products.’ This rise in the price of staple crops is not wholly negative: it can also benefit small farmers. But the
increasing pressure on land is
threatening to displace them from their farms as large-scale plantations take over.
Fuelling hunger When the price of staple crops rises, it affects more than the price of a sandwich. The world’s poorest people already spend 50 to 80 per cent of household income on food – and it is poverty, not scarcity, that is the major cause of hunger. When, in January, the US government announced a plan to produce 35 billion gallons of bioethanol a year by 2017, it was the poor of Mexico who felt the pain. The price of tortillas – the staple diet provided by holein-the-wall shops across poor neighbourhoods in the country – rose by
400 per cent in a matter of weeks. Tens of thousands of people protested in Mexico City in response. Their voices have been joined by others from across the political spectrum. In April, Fidel Castro warned against the ‘sinister idea of converting food into fuel’, prompting the Economistto run a leader article with the unlikely headline ‘Castro was right’. In May, the leading US journal on international policy, Foreign Affairs, published an in-depth analysis of how ‘Biofuels could starve the poor’. In midJune, the UN special rapporteur on the right to food, Jean Ziegler, accused the US and EU of ‘total hypocrisy’ for promoting ethanol production in order to reduce their dependence on oil imports – an act which, he said, could result in ‘hundreds of thousands’ dying from hunger.
Climate con The US push for agrofuels is driven mainly by a concern to ‘reduce dependency on foreign oil’, rather than concern for the climate. Studies of corn-based bio-ethanol (the main source promoted by the US) show that it requires as much, or more, energy to produce as it emits. In Europe, the environmental case is at the centre of the debate. The EU is currently proposing a 10 per cent mandatory target for agrofuels in transport (excluding aviation fuel) by 2020, a measure that was due to be debated in the European Parliament on 26 September. From an environmentalist viewpoint,
EU and UStargets and subsidies are fuelling a growing demand for‘agrofuels’. Farfrom being a sustainable energysource, the increased cultivation ofcrops forfuel threatens the world’s poorwith starvation, damages biodiversityand even contributes to global warming, argues OSCARREYES