Food Inflation: In advance of the G-8 meeting, a new World Bank report blames rising global food prices on the mandated use of biofuels, including ethanol. G-8 leaders may be forced to relax their mandates. Will we?

The report, actually completed in April, likely will make interesting reading as leaders of the G-8 industrialized countries meet in Hokkaido, Japan, this week. One of the topics of discussion is the global food crisis. The report concludes that biofuel mandates intended to fight global warming in Europe and the United States are the prime culprit in a 75% rise in food costs between 2002 and 2008.

President Bush has been among those blaming increased demand in China and India as well as rising fertilizer and energy prices. The U.S. government has said that plant-derived fuels have contributed to less than 3% in food price rises. Not so, says the report, a copy of which was obtained by the British paper The Guardian.

The report says that rising energy and fertilizer costs accounted for an increase of only 15% in that period. "Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," says the report.

The World Bank study, which may have been withheld to avoid embarrassing some G-8 leaders, said: "Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for large price increases."

The World Bank study puts the blame squarely on increased demand from biofuel production. At least a third of U.S. corn goes to making ethanol while about half of EU vegetable oils goes to the production of bio-diesel.

The Al Gore-induced rush to bio-fuels has diverted crops such as corn, soybeans and palm oil from food to fuel. Vast swaths of rain forest in places like Malaysia and Indonesia have been cleared to provide farmland not to feed the hungry but to fuel our cars. Our own grain belt has been increasingly diverted to ethanol over corn flakes.

This has put upward pressure on food prices while ironically doing damage to the environment. In the U.S. increased cultivation has increased runoff from pesticides and fertilizer, creating dead zones for aquatic life from Chesapeake Bay to the Gulf of Mexico.

As Indur M. Goklany of the Cato Institute reports, agricultural expansion leads to higher releases of carbon from biomass and soil above and below ground. Fertilizers that increase yields also increase nitrogen discharge into waters and emissions of nitrous oxide — a greenhouse gas that heats the atmosphere 300 times more effectively than carbon dioxide.

According to David Tilman, University of Minnesota ecologist and co-author of a study published earlier this year in the journal Science, converting the grasslands of the U.S. to corn for ethanol releases excess CO2 emissions of 134 metric tons per hectare (equal to 2.47 acres).

"Any biofuel that causes land clearing is likely to increase global warming," says ecologist Joseph Fargione of the Nature Conservancy. Tim Searchinger, an agricultural expert at Princeton University, says, "There is a huge imbalance between the carbon (released) by plowing up a hectare of forest or grassland from the benefit you get from biofuels."

John McCain, who opposes government subsidies for ethanol, joined other Senate Republicans in May in urging the EPA to waive the current mandate for higher ethanol production. "We need to put an end to flawed government policies that distort the markets, raise food prices artificially and pit producers against consumers."

Biofuels were supposed to save Earth and wean us off fossil fuels. Instead they have raised food prices while harming the environment and taking food from a hungry world and burning it in our gas tanks.

As the World Bank study illustrates, that policy is bankrupt.  Source

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