Saturday, April 19, 2008

IMF and UN Rethorics Against BioFuels: Cut the US and EU Agricultural Subsidies Instead

Corn-based ethanol production in the US is known to be causing part of the current food inflation in the world since corn and grains serve as food basis for many areas of the world. The IMF (Dominique Strauss-Kahn), UN (Jean Ziegler), have recently taken the position of attacking biofuels in general. This rethoric has been increasing daily, to the point of declaring biofuels "a crime against humanity".
The world has over a billion of poor or hungry people, who were hungry before, and nobody was complaining then.
The problem is not biofuels.
Take the example of Brazil. Brazil has been producing Ethanol from sugar cane for over 20 years. Sugar cane is a much higher efficieny method of producing Ethanol. Aproximately half of Brazilians vars run on EThanol, even though the country will become in the future a major oil exporter. At the same time, Brazil has been increasing its production of grains and foods in general. The thesis that biofuels causes food inflation cannot be applied in that case.
Food inflation is complex and has many causes, increased demand from China, India, and other countries, and increased freight costs caused by the increase in the price of oil, and the subsidies in the US and the EU which prevent developing nations from exporting to those markets.
Brazil has proven that is possible to increase the production of biofuels and foods at the same time. Poor countries wish access to new technologies (equipment, techniques, seeds), financing, and the end of agricultural subsidies in the US and Europe. The US is producing Ethanol from what they have (corn), but why would they not rather buy it from Brazil, or partner with central americans countries which could produce it, and at the same time help alleviate the great poverty in these areas of the world? Brazil has been exporting its Ethanol-producing technology, currently doing so in Ghana.
Could the purpose of shifting the attention to biofules to divert attention from the Doha subsidies discussions? The problem has many roots. Could part of the problem be that US and European millionaires with huge lands wish to maintain their subsidies? The IMF and the UN should be attacking this instead. The problem is not biofuels.

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