- By Caroline Henshaw
The food versus fuel debate just took a new turn.
For years, commentators have blamed Asia’s rapidly-expanding middle class for pushing up the cost of food and creating markets so volatile prices have spiked to record levels two times in four years.
But according to new research for the United Nations’ food body, the increasing diversion of grain and oilseeds to create fuel—particularly in the U.S. and Europe, which spend an estimates $8 billion a year supporting their biofuel industries—has had a far greater effect.
A new report by the Committee on World Food Security found that using grains like corn and wheat to create bioethanol, often blended with gasoline to create transport fuel, has added 0.5 percentage points to the growth in world cereal demand, pushing it to 1.8% a year from 1.3%.
In vegetable oils, which are used to make biodiesel and dominate Europe’s market, growth has been even more pronounced. While their use for food slowed down between the 1990s and 2000s, from 4.4% to 3.3% a year, industrial use soared, so that in the decade to 2010 it grew from 11% to 24% of world use.
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“Events, my dear boy, events,” said British former Prime Minister Harold Macmillan when asked what represented the greatest challenge for a statesman. For many corporations today, it is “extreme weather events” which provide a headache for a CEO.
La Niña, Spanish for little girl, is a rather unthreatening name to describe a weather cycle which has wrought havoc since its emergence last summer. Its trail of destruction has been indiscriminate: floods in Sri Lanka, the Philippines, eastern Australia and South Africa have all been “consistent” with past La Niña phenomena.
Scientists suggest the recent Brazilian deluge and, perhaps more tenuously, the early cold winter in Europe, are similarly linked.
The burning question remains: how long will it continue?