Are Biofuel Production and Rising Food Prices Connected?

Czech president Václav Klaus, who is known for his anti-environmentalist stance, has come out in criticism of the rapidly-developing biofuels industry, and his concerns are echoed elsewhere.

In his new year’s speech, Czech president Václav Klaus also railed against the side-effects of biofuel production, albeit in somewhat less dramatic tones. He called biofuels a ‘cloud on the horizon’ of the Czech economy:

“The price of food is rising, in part because we are using more and more of our arable land for the production of so-called renewable sources of energy, and not for food. We should try and behave responsibly when it comes to such matters and not seek a quick-fix to our energy problems.”

The European Union would like ten percent of all of the fuel used on the continent to be ‘bio’ by 2020. But within the EU’s individual member states, the debate still rages as to whether biofuels are to blame for the world’s food problems. Tomáš Sedláček is a Czech economist, and a strategist at the country’s ČSOB bank:

“Biofuels came at a time when food prices were rising anyway. So biofuels came along at an unfortunate time. It is quite evident that biofuels do play a role in rising food prices, though a more significant role is played by the increase in Chinese and Indian consumption.”

The production and use of ethanol and other such biofuels is being promoted in Europe and the US by government subsidies. Again, Tomáš Sedláček:

“Nobody, however, thought about the impact that biofuels might have – world famine. And what we see today in one sixth of the world’s population that live on one dollar a day, is that this is causing a very rapid decrease in their disposable income. So in a way we are to blame for this increase in world hunger just by our need to be ecological and environmentally friendly.”

What can be done to stop a global food crisis is currently the topic of much discussion. And cutting down on biofuel production doesn’t seem to be one of the most popular options. Forty-six of the world’s biggest grain producers have stopped exporting their corn, and the World Bank is calling on developed nations to provide half a billion dollars to tackle the crisis.

View the Radio Prague story by clicking here.

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