Biofuel mandates push food prices to catastrophic levels

Let me ask you a question. If you had nothing left in your larder apart from one meagre ingredient, would you use it to feed your family, or turn it into petrol to fuel your car? The answer seems pretty clear to me.

Let me ask you a question. If you had nothing left in your larder apart from one meagre ingredient, would you use it to feed your family, or turn it into petrol to fuel your car? The answer seems pretty clear to me.

Now, let me ask you another. If a bad drought ruined the corn harvest in your country, and if dozens of countries around the world relied on it, what should be done with the little that can be salvaged? Should it go into the food system, or would you prefer the government to divert it into fuel?

You would think that would be a no-brainer: the corn should be used for food.

But guess what? That's not what happens in real life. Because regardless of how destroyed a harvest is, countries that operate biofuel mandates still insist on a fixed volume of that crop (yes, that's volume, not percentage) being diverted out of the food system, so it can be turned into petrol. And that can leave very little for food.

That's what is happening in the USA this summer. A devastating drought has decimated the corn crop and most of what has been salvaged is still being turned into biofuels on the government's insistence.

If the impact of this was felt only in the USA, then perhaps the rest of the world wouldn't have to take notice. But the globalisation of markets means that rising corn prices in the US is having an immediate knock-on effect across the rest of the world.

After trying to find cheaper alternatives, which inevitably become more expensive themselves, ordinary consumers, farmers and processors are all eventually forced to spend more money. Now, with prices already reaching an all-time high, governments are considering how to react. The fear is that some countries like Russia will respond by banning grain exports, something that could bring the world's food system to its knees.

And it's the most vulnerable people - those living in the world's poorest countries who already spend up to 80% of their household income on food - that are being hit first. They haven't recovered from previous food crises and don't have any food stocks or financial reserves to fall back on. But you and I will also be hit, and we'll notice it at the supermarket check-out too.

Instead of improving the situation, the UK's biofuel targets are fanning the flames. As the price of US corn and corn ethanol rises, the UK seems to be joining the frenzy, with the Ensus refinery announcing that it will restart production to turn 1 million tonnes of wheat into ethanol each year. Instead of working to prevent an increase in the price of a loaf of bread, UK biofuels industry is, it seems, profiting from the crisis.

With growing numbers of UK families struggling to put food on the table, and whole communities in poor countries on their knees, isn't it time the British public demanded an end to the madness of biofuel mandates that benefit a few whilst destroying the lives of others?

Close

What's Hot