Ethanol and World Hunger

Saturday, July 2, 2011

The following is written by the brothers, Jeffrey and Adrian Goettemoeller, experts in environmental remediation and sustainable agriculture, and authors of the book, Sustainable Ethanol.

Growing corn in Mexico.
Understanding the relationship between ethanol and world hunger requires counter-intuitive thinking. Higher grain prices and decreased grain exports do not necessarily exacerbate world hunger. In fact, the opposite could be true in some cases. Most U.S. corn exports go to relatively wealthy countries. Japan topped the list in 2004. Significant amounts also go to less wealthy nations such as Egypt and Mexico. Those with the least income, however, often lack the means to purchase imported grains at any price. Furthermore, corn and other inexpensive commodities imported from the U.S. tend to take away markets for struggling farmers. This can damage rural economies and deepen poverty.

Less than 2% of the national incomes of rich countries come from agriculture. In middle and low-income countries, that figure rises to 17%-35% of gross domestic product. According to the International Food Policy Research Institute, over 75% of the poor in the developing world live in rural areas, and most are farmers. In September 2006, National Public Radio reported U.S. corn exports have damaged the ability of Mexican farmers to make a living. Many of these destitute farmers are attempting to enter the U.S.

In 2007, Alexandra Spieldoch of the Institute for Agriculture and Trade Policy made a statement before the U.S. House Committee on Ways and Means about the consequences of selling grain at low prices in developing countries. "...without substantial government support," said Spieldoch, "developing-country farmers are driven out of their local markets by the below-cost imports. ...farmers who sell their products to exporters find their market share undermined by the lower-cost competition." According to Spieldoch, agricultural development within developing countries helps drive economic growth. "Research shows," said Spieldoch, "that domestic food productivity is more effective in stabilizing developing-country food security than the reliance on inexpensive (i.e., dumped) food imports. A fair price for the farmer's production will also help stabilize demand for wage labor in the local economy."

Keeping grain prices quite low might seem like a good way to fight poverty, but the opposite result can come about when economies based largely on agriculture are damaged. Ironically, then, a reduction in U.S. exports resulting from increased corn ethanol production might help alleviate poverty-driven hunger in some places when coupled with efforts to enhance food production within developing countries.

Read more:

The Food Industry's Propaganda Campaign Against Ethanol

BBC: Will Biofuel Leave the Poor Hungry?

Ethanol Policy and Meat Prices: Unspinning the Truth

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