Now it's food versus fuel

What is the next great global problem we have to fear? The answer is not climate change and global warming, but food shortage and starvation. Suddenly, and in ways largely unforeseen by experts, a serious shortage of food supplies, especially corn and rice, has crept up on the world. The result has been soaring food prices and spreading social unrest, leading to outright riots and violence in many countries.

Disturbances and protests have occurred in Egypt, Pakistan, Burkino Faso, Eritrea, Ethiopia, the Philippines, Bangladesh, Botswana, Haiti — to name a few on a much longer list. The price of corn has tripled in two years and the price of rice by two and a half times. Grain and rice importers have simply been unable to fulfill their contracts.

There should be no doubt about the urgency of the situation. Throughout history it is food riots that have brought down governments and fomented revolutions — as former U.S. Vice President Al Gore reminds us in one of his more balanced books on the world environment, "Earth in the Balance."

Why has this crisis so rapidly emerged? Of course, there are several contributory causes, but a prominent one is the wholesale switching of farm production across the world from food to biofuels. The International Food Policy Research Institute in Washington estimates that between a quarter and a third of the massive price rise is caused by biofuel production. Other estimates put it much higher.

The devastating price effect of biofuels is not the only problem. One of Britain's most senior government scientific advisers has warned that cutting down forest vegetation to grow biofuels is "profoundly stupid," and a distinguished advisory panel to the European Advisory Agency (EAA) has concluded that the officially encouraged rush to biofuels is creating a range of ugly side effects, from deforestation to large-scale food-price inflation.

The EAA panel has gone on to recommend that the European Union's biofuel target — 10 percent of all fuels by 2020 — should be abandoned. In the United States, one fifth of the nation's entire corn crop has now been diverted to the production of ethanol for motor fuel. This has had knock-on effects on other crops, such as soybeans, the production of which has been sharply cut, in turn fostering a global shortage of cooking oil.

The pressure is likely to rise, rather than fall, unless there is a major re-think about energy policy. The world's population is growing by 73 million a year, and China and India's billions are acquiring appetites for meat and milk, all of which means more grain to feed livestock. If Asia follows Japan in food habits as it grows richer, its protein requirements will multiply many times over.

But here we come to the heart of the problem. One man's meal is another man's tank of fuel. As crude oil prices soar upward governments everywhere have looked for alternative fuel sources. Often — as in the EU case — they have hardly bothered to think through all consequences of new regulations ( and subsidies) requiring energy companies to switch to biofuel provision. The dogged insistence by the EU Commission that Europe should stick to its biofuel targets, despite mounting evidence of the backlash, is a classic example of the dangers of over-centralized decision-making by a non-accountable body.

The problem needs the most careful and thoughtful handling by national governments, which often face varying circumstances. Not all biofuels are bad. In Brazil, the conversion of sugar cane into biofuel is proving both energy-efficient and commercially sensible. Fuel from sugar cane can be produced at around the equivalent of $35 a barrel of oil and the sugar cane can be grown, and converted on land that would be otherwise derelict. No rain forests need be cleared for sugar cane growing. Other types of agriculture, however, such as ranching and soya crops, are intruding on precious Amazon rain forest areas — a direct result of the diversion of U.S. farmland away from soya and into ethanol crops.

Thus one thing leads to another, in ways that impulsive politicians and policymakers, rushing to sound popular, fail to foresee. A new generation of biomass fuels, based purely on waste and garbage, could improve matters, but that is not yet on offer.

In the meantime, the humane and wise thing for world governments now to do would be to close down biofuel incentives to farmers, remove the regulations requiring energy companies to supply a percentage of biofuels and allow the importation of the one truly clean biofuel, Brazilian sugar-cane ethanol.

But, surprise, surprise, both the American and EU administrations have fearsome trade barriers against such imports, in order to protect their own farmers and allow them to enjoy the biofuels bonanza.

So it is the world's starving people who have to pay for this folly. Truly the capacity of remote officials and incompetent governments to make any situation, however bad, even worse, seems unlimited.

David Howell is a former British Cabinet minister and former chairman of the Commons Foreign Affairs Committee. He is now a member of the House of Lords.