Food or fuel? It’s the ethanol battle

Debate generates loads of controversy but few hard facts

By todd murphy

Pamplin Media Group, Aug 14, 2008, Updated Oct 30, 2009 (4 Reader comments)

MARK HIRSCH / GETTY IMAGES

Corn production for ethanol has been blamed for dramatically increasing food costs, and critics suggest ethanol actually may produce more greenhouse gases than gasoline. Ethanol advocates, though, point to the future when the alcohol-based fuel can be produced far more cheaply and efficiently.

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Ethanol – the granddaddy of the biofuels movement – is in a food fight.

Or a fuel fight. Or a food-versus-fuel fight.

How about these for fighting words: A United Nations food expert recently described ethanol as “a crime against humanity.”

Then, last month, an unpublished but much publicized World Bank report – leaked to London’s Guardian newspaper – concluded that ethanol production, especially in the United States, had raised world food prices by 75 percent in the past six years.

These reports followed a study published in Science magazine earlier this year suggesting that ethanol actually may produce more greenhouse gases than gasoline.

It’s enough to drive environmentalists to their electric cars. And the reports have certainly caused some trepidation within governments that for years have subsidized or supported ethanol.

But ethanol supporters aren’t just sulking passively amid a hail of hot dogs. They’re hitting back, arguing that while ethanol is far from perfect, its impact on world food prices is small, its effect on the environment is mostly positive, and the controversy is more about finger-pointing than it is about science.

Sustainable Life has decided to enter the fray, or at least crystallize the debate, by asking, and trying to answer, three central questions.

Does ethanol raise food prices?

This criticism of ethanol has been recently propelled to the forefront of the debate by soaring world food prices during the past two years.

The consensus is that ethanol is indeed responsible for making food more expensive. The question is how much. Estimates range from a paltry 2 percent or 3 percent to the World Bank’s high of 75 percent.

Ethanol accounts for a significant but not dominant share of U.S. corn production. Last year, 17 percent of the 13 billion bushels of field corn produced by U.S. farmers was used for ethanol.

Ethanol critics assert that as farmers grow more corn for ethanol, they grow less corn – and other crops – for food.

Prices of many basic foods have shot up in the last few years; corn’s rise has been phenomenal, doubling in two years to more than $8 a bushel this spring. (The price has since slid back a bit from that high.)

Ethanol backers point out that the type of corn that is usually grown for ethanol is not fit for human consumption. That’s irrelevant, says William Jaeger, an Oregon State University agricultural economist who published a study last year questioning ethanol’s benefits.

First, the corn grown for ethanol is the same as that used in animal feed – so higher corn prices translate into higher prices for beef, pork, and poultry. (In April, Texas Gov. Rick Perry, responding to ranchers’ concerns about surging feed prices, asked the Environmental Protection Agency to waive federal mandates that would require that 9 billion gallons of ethanol be blended into the nation’s gasoline from Sept. 1 through August of next year.)

But as corn prices rise, land that would be used for other crops is diverted to corn, choking production of those other crops, Jaeger says. And as the cost of livestock feed rises, so does the cost of meat.

“The laws of supply and demand still work, and both producers and consumers will adjust their choices,” he says. “What biofuels are causing in one market will have ramifications in another market.”

Ethanol advocates say crop displacement has been minimal, and has little effect on food prices.

The increase in food prices is largely driven by the surging cost of oil and fertilizer, a strong appetite for American food products in India, China and overseas markets, and two years of drought in Australia, says Brent Searle, an economist with the Oregon Department of Agriculture.

“I think it’s a red herring,” Searle said of the argument that ethanol production is pushing up the price of food.

Still, it’s not hard to find examples. Ironically (since ethanol is a kind of alcohol) local craft brewers grouse that barley prices are up – hiking the cost of a pint – because farmers are planting corn for ethanol instead.