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Fans of biofuels give the impression we could soon be running cars on maize,
producing electricity with sugar, and getting power from palm oil, February
2007 by Ruth Gidley.

Using plants to feed our fuel needs sounds like a great idea, and it could
be a moneyspinner for some poor countries, but it might well mean people go
hungry as food prices rise.

The biofuel boom is only just beginning yet already it has pushed up the
cost of staples in places like Mexico where rocketing tortilla prices have
sparked angry protests.

Experts are talking about a permanent change in food economics.

"We're into a new structure of markets," says British food aid expert Edward
Clay. "It could have profound implications on poor people."

As oil resources run low, and the message about climate change goes
mainstream, it's no surprise that governments and oil companies are looking
for alternative fuel sources. U.S. President George W. Bush has made it
clear he supports a major shift towards biofuels, and farmers in the United
States are getting into it in a big way.

In the agricultural state of Iowa farmers say they are already giving up
rotating corn and soya crops to focus on corn alone, which is now highly
lucrative as a material for biofuel production.

Tortilla protests

Soaring U.S. demand for ethanol - produced from crops like maize and sugar
cane - has sent corn prices to their highest level in a decade.

Mexicans are already feeling the impact. Tens of thousands took to the
streets in January when the price of tortillas tripled to 15 pesos ($1.36) a
kilogramme (2.2 pounds) - about 35 of the flat corn patties that are
Mexico's staple food.

Since half of Mexico lives on $5 a day or less, that's no small jump, and
the Mexican president - who generally presents himself as a champion of free
trade - stepped in to cap prices at 78 cents a kilo.

Food prices have been on a downward slide ever since the Second World War,
but Clay says one of the big questions now is whether biofuels could reverse
that process and take us into a new economic era with obvious implications
for the poor.

Farmers can raise crop production pretty quickly so the current hike could
be temporary, Clay says. And sky-high oil prices - another factor in making
food expensive - could drop.

"By next year, (food) prices will begin to fall away," he predicts. "But
that doesn't mean they'll ever fall to what they were before."

China

The United States is not the only country jumping on the biofuel bandwagon.

China has gone on to become the world's third-largest bio-ethanol producer
after Brazil and the United States, according to Singapore's Today
newspaper.

Economic boomers China and India want to be self-sufficient in fuel, but
they also want to be able to feed themselves.

And China's expanding middle classes want to eat more meat, which requires
grain production for feed, which is also pushing up food prices.

Worryingly, numerous scientists and economists say China and India don't
have enough water to increase grain production, whether it's for animals or
fuel.

In December, China put limits on corn-to-ethanol production so as not to
lose more precious water to producing fuel at the expense of food, Today
reports.

But if China and India keep using up land and water resources at their
current rate, they'll have to buy grain from other countries. "When two of
the world's top three grain producers become importers, it will have a big
impact on prices internationally," Today says.

Jatropha trees

However, biofuels could also bring benefits for the world's poor, according
to Robert Zachritz, senior policy adviser for aid agency World Vision.

Although food will be more expensive and there will be less food aid to go
round for at least a little while, low-income countries could cash in on
high prices for biofuel crops.

"It's a short-term challenge and a long-term opportunity," Zachritz says.

Is it possible to produce fodder for biofuels without taking land away from
food production or chopping down forests? Sometimes.

Malawi, in southern Africa, is planting jatropha trees for biodiesel on
plantations formerly cultivated for tobacco, according to alternative news
agency Panos. Jatrophas - which grow even in poor soil and are touted as a
good antidote to erosion - yield a watery rubber when cut.

The biofuel goldrush is also likely to have a knock-on effect on food aid.

Now that U.S. farmers can make good money selling grain to make ethanol,
there could be a shift in its policy of giving 99 percent of food aid
contributions in goods rather than cash.

It might now actually be more convenient for the United States to buy its
food aid allotment elsewhere, food aid expert Clay says.

The United States is the world's largest food aid donor, but it has come
under heavy criticism, especially from Europeans, who say aid in kind
distorts local markets, often takes a long time to arrive, and is more
expensive to ship than to buy locally.

Bush has been trying to persuade Congress to change the law to allow up to
25 percent of the country's food aid in cash, but the bill's been rejected
in the past under pressure from farmers who didn't want to lose what was
more or less a subsidy for their grains.

The bill is up before Congress again this year.

For the last few years, the world's annual food aid donations have been
around 10 million tonnes, in line with an international agreement in place
since the 1960s for wealthy countries to give at least 5 million tonnes of
food annually.

But donations fluctuate depending on prices, and relief organisations are
already bracing themselves for a likely drop.

Clay says when food prices last rose in 1995 parts of the world where food
aid was used in development projects - like school feeding programmes - were
the most vulnerable to cutbacks in 1996.

The same places - Bangladesh, Central America, Eritrea, Ethiopia and North
Korea, for example - will probably be first to feel the pinch now.

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