Food Crisis: Bio-Fuel policy Of USA And Europe To Blame

Food Crisis: Bio-Fuel policy Of USA And Europe To Blame

President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that: "Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases."

In an article in the Guardian newspaper in the UK by Aditya Chakrabortty, based on a currently unavailable World Bank report obtained by the Guardian. Chakrabortty writes.”Bio-fuels have forced global food prices up by 75% - far more than previously estimated” - according to a confidential World Bank report obtained by the Guardian.“While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat."

It argues that production of bio-fuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of bio-diesel. Second, farmers have been encouraged to set land aside for bio-fuel production. Third, it has sparked financial speculation in grains, driving prices up higher.

Food consumption in INDIA in comparison to USA

The Food and Agriculture Organization’s statistics demonstrate clearly that there has hardly been any rise in food consumption in India in the years the country was registering relatively high rates of economic growth. An array of Indian economists of diverse persuasions agree that the per capita consumption of food has, in fact, declined in India in this period (while overall food grain consumption has moved up marginally).

Dr Mahendra Dev, the incoming chairman of the Commission for Agricultural Costs and Prices (CACP), argues that in the middle of this decade the consumption of food grains in the US has gone up as much as 11 times as against an insignificant two percent increase in India in the same period.

Western Europe or North America are the real culprits for food crisis

According to the CACP chief, the consumption pattern for food in developed countries is three or four times higher than in India. Besides, in the US, food crops acreage has been made over to the production of bio-fuels in a significant manner, affecting the global availability of food grains and hence contributing to high prices.

“We are still consuming a lot less food than people in western Europe or North America”, he notes.( Dr Himanshu of the Centre for Studies in Regional Development at JNU,)

About 70 percent of US corn production used to provide cattle feed to yield meat and dairy products. But since biofuels are now substituting corn in the US in a significant way, cattle are being fed on wheat that was earlier used for human consumption. This has led to a spurt in demand for cereals in the US market. The international scarcity thus caused has contributed considerably to the price escalation.Moreover, It takes about 2,500 gallons of water to produce a pound of beef, and the area of land needed to feed a meat eater could feed 10 or more vegetarians.

Consequences

If you are one of the 2.8 billion people in the world who live on under $2 a day, you may pay for the recent surge in growing grain for petrol with your life. The growth in bio-fuel consumption has not only benefited the rich countries and denuded the poorest, but it has depleted global grain stockpiles , pushing millions more of the world’s poor deeper into poverty.

WORST STILL TO COME

By 2010, across Europe it will be mandatory, for example, for petrol retailers to mix 5.75 per cent of into fuel sold to motorists. However, it is not just in the EU that we are being asked to burn crops to fuel our cars – the USA, India, Brazil and China have similar prospective schemes. India, for example, has pledged to meet 10 per cent of its vehicle fuel needs with bio-fuels. In America, bio-fuel consumption for motor vehicles is now enough to cover all the import needs of the 82 nations classified by the UN as ‘low-income food deficit countries’. It is probably too simplistic to suggest that our transport systems can lead to starvation in the developing world, but the connection is unavoidable

LASTLY

In Italy, women have marched in protest as wheat prices more than doubled. In the UK, families are feeling the pinch, especially in the price of food commodities . From Haiti to Uzbekistan, the poor are bearing the brunt of the problem. Hundreds of people have died in protests across the world. In India, rice has been rationed. In April the World Bank predicted that at least 100 million people across the globe could face starvation. EU estimates suggest that 25,000 people are dying daily from hunger as food prices reach their highest level since 1945. In June the oil price keeps rising to an unprecedented 135 dollars a barrel.