Thursday, April 7, 2011

"Transmission Losses" - The Cost of Bio-fuels

The Times has story of the consequences of crop production for bio-fuels: higher food prices and tragic irony.
...last year, 98 percent of cassava chips exported from Thailand, the world’s largest cassava exporter, went to just one place and almost all for one purpose: to China to make biofuel.
...It can be tricky predicting how new demand from the biofuel sector will affect the supply and price of food. Sometimes, as with corn or cassava, direct competition between purchasers drives up the prices of biofuel ingredients. In other instances, shortages and price inflation occur because farmers who formerly grew crops like vegetables for consumption plant different crops that can be used for fuel.

China learned this the hard way nearly a decade ago when it set out to make bioethanol from corn, only to discover that the plan caused alarming shortages and a rise in food prices. In 2007 the government banned the use of grains to make biofuel. [emphasis added.] ...Although a mainstay of diets in much of Africa, cassava is not central to Asian diets...

“For Americans it may mean a few extra cents for a box of cereal,” she said. “But that kind of increase puts corn out of the range of impoverished people.”

Higher prices also mean that groups like the World Food Program can buy less food to feed the world’s hungry.

[Source: NY Times]