Biofuels and wheat prices

Private Eye has an important article on Biofuels. ( Private Eye 16th May 2008 p 15 )
Papers and Health Journals are beginning to feel unease about the use of valuable land to grow crops to make these fuels. Last year the European Union decided to sell its remaining grain stocks at knockdown prices just before global grain prices doubled and the world faced its first serious food shortage for decades?
The EU has now been forced to become the world’s largest grain importer, buying in 18m tons of wheat at prices much higher than those it was selling for only a short time earlier.
The reason for this follows the criticism of the EU for piling up vast food mountains, consequent upon its protection of European farmers by buying their crops when prices fell below a certain level. The EU then paid further subsidies for those food mountains which were sold off to the Third World at rock-bottom prices, doing immense damage to the farmers of some of the poorest countries of the world, who could not compete with the EU’s dumping of its cheap surpluses.
In 2007, having changed from subsidising over-production and anticipating a bumper European harvest. Brussels decided to empty its warehouses, selling off millions of tons of grain for animal feed. Unfortunately, down came the rains, with disastrous effects on the harvest. Europe was thus forced to buy million tons of wheat at twice the price it had been at the start of the summer.
The price of a loaf of bread is now rising above £1, and wheat and other cereal prices have soared in the past year. One explanation is that, as China and India become richer, more of their people can afford to eat meat, and they must thus import more grain to feed their animals. Last year the imports of wheat by China and India, the world’s two largest wheat growers, scarcely rose.
By far the biggest increase in demand, came from the EU and America. US cereal consumption last year rose by 12 percent, almost entirely due to that country’s involvement with biofuels, using up no less than 30m tons of corn.
Biofuels cost 70 percent more energy to produce than they generate, laying waste to rainforests and adding to pollution . US farmers, receive a hefty subsidy to grow them, and the EU has decided that 10 percent of our transport energy comes from biofuels within 12 years. Every acre of land used to make biofuel is taken away from producing food.
In the EU alone it will be necessary to divert more than 30 percent of our grain-producing land to biofuel.
This diversion of crops into biofuels will affect the provision of food to poorer communities. Malnutrition is such a major problem for much of the world, to further aggravate this cannot be wise.

Martin Eastwood
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