By Alex Binkley
Originally published in Ontario Farmer
In the midst of all the fashionable bashing of biofuel production, it’s important to remember the tongue in cheek journalistic saying – don’t let a few facts stand in the way of a good story.
In case you haven’t heard, biofuels are widely blamed for food shortages and riots in various parts of the world.
The activists, economists and other alarmists ignore the current calamity has been 30 years or more in the making. The influence of biofuels to the problem is minor.
Since the 1970s the prices farmers received for grains and other crops fell steadily behind the rate of inflation. Farmers became more productive and expanded their operations to compensate for the erosion of their incomes. Not all were successful and agriculture suffered but for years consumption remained behind global production creating large annual stockpiles.
In response, Europe and the United States adopted programs to take farmland out of production. Canada didn’t but if you drive the back roads of Ontario and it’s supposed to be the same in western Canada, you see lots of underused fields farmers could no longer afford to crop.
In the 1990s, the surplus began to shrink as the populations in developing countries continued to grow and improving incomes brought a better diet.
The surplus dwindled to the point that a crop failure such as the drought that has afflicted Australia and Western Canada in recent years was felt around the world.
Biofuels gained favour a couple of years ago as a way to diversify the markets farmers had for their crops not shortchange consumers or livestock producers.
Now there’s another saying that applies to biofuels—the best cure for higher prices is higher prices.
Farmers will certainly plant more crops this year if they can afford to and find enough seeds and other inputs to take advantage of the higher prices. That will likely take the speculative push out of the prices but hopefully they will remain strong enough to encourage farmers to bring idle land back into production.
Later this month the Commons will give third reading to a bill that sets 5% ethanol in gasoline targets for Canada. Agriculture Minister Gerry Ritz, who championed biofuels long before he got in cabinet, says that will only take 5% of current Canadian production. That’s current not what a reinvigorated crop sector might produce in the future.
While the bill is passing the Commons, several social activist groups plan meetings across the country to denounce biofuels as the villain in the world’s latest food crisis. For good measure, they’re throwing fear mongering about biotechnology, corporate control of agriculture and the other usual boogey men.
Perhaps these groups could focus on what’s causing food production problems in say Zimbabwe or South Africa or Eastern Europe which all have tremendous agriculture potential.
It’s certainly not biofuels. Undoubtedly there are problems in some parts of the world caused by biofuel production but how does one explain the 77% increase in rice prices in the last year, which isn't used in biofuel production?
______