You can't have your steak and transport it too

Posted by Julia Olmstead (Guest Contributor) at 2:32 PM on 04 Jan 2007

Read more about: Lester Brown

Worried that no one's going to post on ethanol today? Let me ease your troubled mind ...

The world may soon be facing the highest food prices in history, according to Lester Brown of the Earth Policy Institute. The group released a missive today that says increased corn demand caused by the ethanol boom will dramatically raise food costs in the near future:

The competition for grain between the world's 800 million motorists who want to maintain their mobility and its 2 billion poorest people who are simply trying to survive is emerging as an epic issue. Soaring food prices could lead to urban food riots in scores of lower-income countries that rely on grain imports, such as Indonesia, Egypt, Algeria, Nigeria, and Mexico. The resulting political instability could in turn disrupt global economic progress, directly affecting all countries. It is not only food prices that are at stake, but trends in the Nikkei Index and the Dow Jones 500 as well.

This is more than a little alarmist and extreme, and a nice argument could be made that the dumping of subsidized, overproduced U.S. corn in "lower-income countries", which undermines local markets and forces small farmers out of business, could stand to be staunched.

But choosing to produce more corn, and diverting that corn to ethanol production, is having and will have serious consequences, not only environmentally, as I've talked lots about here, but yes, probably on food prices too.

What I think will have an even greater impact on the lives of the less-fortunate residents of this planet (and ultimately, probably on all of us) is the destruction of tropical ecosystems to make way for fuel crops like oil palm.

It's funny, I've always viewed soybeans sort of on par with corn -- a lesser evil, since they're legumes and therefore fix nitrogen, but a vile member just the same of the two-punch agricultural nightmare we live here in Iowa. But lately, as farmers are increasingly going all-corn, all-the-time, I've been finding myself pining for the good old diverse days of corn and beans. Sigh.

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Troubled Human beings

When human beings start using food to fuel devices so leaving millions to starve to death, you must scratch your head!

The oil mentality seems to have blinkered thought.

by Zarkov at 2:54 PM on 04 Jan 2007

Perplexingly, no mention of the "S" word

Thank you Julia, for posting that. I received the Earth Policy News article also and mentally congratulated Lester Brown and the EPI for putting the numbers together. I recommend that Gristers follow the link and read the whole article.

But I was (once again) flummoxed by Brown's continuing reluctance to mention subsidies as a factor driving the biofuel business. (In past missives he has only mentioned the high price of petroleum.)

That leads him to conclude with only a partial recommendation. "It is time for a moratorium on the licensing of new distilleries", he writes, "a time-out, while we catch our breath and decide how much corn can be used for ethanol without dramatically raising food prices."

Why not simply do away with the subsidies that are feeding the frenzy?

Then: "The policy goal should be to use just enough fuel ethanol to support corn prices and farm incomes but not so much that it disrupts the world food economy."

What new system -- given that nothing has worked in the past -- would enable the government to fine-tune support of corn prices and farm incomes ... not too hot, and not too cold, but just right? Details, please, Dr. Brown.

These are only my personal opinions.

by Ron Steenblik at 3:13 PM on 04 Jan 2007

Sorry to come back ...

... but this statement really bugs me

"It is time for a moratorium on the licensing of new distilleries, a time-out, while we catch our breath and decide how much corn can be used for ethanol without dramatically raising food prices."

Who is we in this case? The nation collectively? The USDA? A new Interstate Fuel-Food Tradeoff Commission? And say that "we" come up with some magic number for the amount of corn that can be used for ethanol without dramatically raising food prices (which will be a constantly moving target). What then?

These are only my personal opinions.

by Ron Steenblik at 3:42 PM on 04 Jan 2007

Me too

I also have trouble understanding L.B.'s vision.

Let's see: we know he hates corn ethanol and hunger, too. He doesn't seem to mind subsidies but fears the havoc "urban food riots" could wreak on our stock portfolios. Hmm.

What gets me most though is that he seems, at least from his analysis in this latest missive, to have some wacky ideas about the root causes of hunger in the third world. Low global grain prices, which have been the standard for decades now, haven't seemed to do much to alleviate hunger. If we're talking about what hurts the impoverished (and particularly small farmers) I would say that artificially low corn prices (here are your subsidies again, Ron) have been much more harmful than the threat posed by ethanol.

by Julia Olmstead at 8:10 PM on 04 Jan 2007

Me Too

Sounds like policy that provides cheap corn to poor countries has been wrong and that policy that takes away cheap corn to poor countries will be wrong. I suspect, based on the concern for high prices, that providing higher priced corn to poor countries would not be a proper policy as well. I think this reflects a general frustration with the situation. I don't think it is related to effective policy.

by ffletcher at 8:44 AM on 05 Jan 2007

Iowa

"Why not simply do away with the subsidies that are feeding the frenzy?"

One reason comes quickly to mind: Iowa holds the first presidential caucus in the country, and fortunes rise or fall in Iowa. No candidate or would be candidate would dare speak out against subsidies or ethanol as long as he or she may one day need to win in Iowa.

That's one reason I'm glad Vilsack is in the race. Let's just skip Iowa altogether.

by KathyF at 8:48 AM on 05 Jan 2007

Rewording

OK, what I should have said (and meant to say) was, why isn't Lester Brown's first recommendation do away with the subsidies that are feeding the frenzy?

Interesting thought on the neutralizing role Vilsak could play, Kathy.

These are only my personal opinions.

by Ron Steenblik at 8:58 AM on 05 Jan 2007

Vilsack

I'm not so sure Vilsack is going to have much of a neutralizing effect here. There is a lot of respect and affection for him among Iowa democrats, but I think there are others in the running that are found to be much more compelling presidential material than homeboy.

More importantly, it's our senators Harkin and Grassley who really do the ag policy work. I don't anticipate them changing course any time soon. I can only hope that gradually our representatives can be persuaded to support the redirection of farm support programs away from promoting corn and bean production. A lot of good could come from incentivizing farmers to practice working conservation -- things like incorporating alfalfa and other perennials into their cropping systems, putting livestock back on pasture, etc.

by Julia Olmstead at 9:17 AM on 05 Jan 2007

Food vs. Fuel

A very smart friend of mine says this about the food vs. fuel debate: "it is not a debate really, when one thinks about it food is merely a specialized form of fuel, and the interesting thing to think about is what happens when that day comes where an individual has to decide between the $8.00 hamburger and driving his/her SUV? Will they finally understand that the only way to survive is to change the way we live"

Meat prices WILL be higher, but is that a bad thing? Meat consumption is at it's highest level in human history, and along with it increased health problems. Besides the leftovers from the ethanol process have to be used in some form so feeding it to animals is seen as not having as big an impact as some would think.

However, I believe that even the meat industry is vastly niave about DDG's (the by-product) being a cheap feed source for animals. You will soon see more and more ethanol plants using DDG's as a fuel source for running the plant replacing natural gas.

The real debate needs to be focused on the production agriculture vs. the environment. More corn-on-corn WILL be planted and that means increased tillage, increased inputs i.e. fertilizer, pesticedes, herbicides, etc.

So what is the solution? I'm not that foolish to think their is but on solution but I will say that we need more 3rd crops!!!

by DBLJ at 3:25 PM on 05 Jan 2007

Vilsack

As far as Vilsack goes, I commend him for coming out against the subsidy system in its current form but where was he when it really counted?

I also would question why he supported socialism for the rich by instituitng the Iowa Values Fund that has paid out millions to Wells Fargo and Wells Blue Bunny to name a few.

by DBLJ at 3:29 PM on 05 Jan 2007

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You can't have your steak and transport it too

More from Lester Brown on ethanol and food costs

Posted by Julia Olmstead (Guest Contributor) at 2:32 PM on 04 Jan 2007