US says food summit struggles to agree on biofuels
Reuters
Jun 4, 2006
ROME, June 4 (Reuters) - U.S. Agriculture Secretary Ed Schafer said on Wednesday he doubted the U.N. food crisis summit in Rome would yield an agreement on biofuels and foresaw trouble with the wording on the subject in the final declaration. "I doubt there will be a positive agreement on biofuels at the end of the summit," he told reporters. The United States and Brazil had to defend their biofuel industries from charges that it diverted crops from food, contributing to higher prices.[10]
The Bush administration, which has helped foster a rapid surge in production of corn-based ethanol, believes biofuels in the United States account for only 2 percent to 3 percent of the price surge. Other critics say biofuels have played a much larger role, accounting for up to 30 percent of the increase globally. U.S. officials, sticking by their numbers, nonetheless stress that they would like to shift biofuel production to crops not linked to food, such as switchgrass. Brazil, which uses sugarcane to produce its biofuel, is also likely to stick up for the alternative fuel at the Rome summit, which opens on Tuesday.
[11] Some of the biggest members of the UN's Food and Agriculture Organization (FAO), which is sponsoring the three-day summit, are building massive biofuel industries. Among them are the United States, Canada and Brazil. Many poor African and Asian countries that are also FAO members blame biofuel production for inflating food prices to the point they are becoming unaffordable. In the first three months of this year alone, the FAO food-price index rose 53 per cent over the same period in 2007.[3]
According to the United States Department of Agriculture (USDA), biofuel production is responsible for only a 2-3 per cent increase in global food prices while reducing the consumption of crude oil by 1m barrels a day.[12] During that time, biofuel production in the U.S. alone rose by 50 million tonnes, eating up almost the entire global increase.
Peter O'Driscoll, Executive Director, ActionAid USA said: '''I fully agree with U.S. Agriculture Secretary, Ed Schafer, that we have to talk about the real issues (behind the food price increases) and demand for biofuels is certainly one of those issues."[13]
"Nobody understands how $11-12bn/year subsidies in 2006 and protective tariff policies have had the effect of diverting 100m tonnes of cereals from human consumption, mostly to satisfy a thirst for fuel for vehicles," said Jacques Diouf, director general of FAO. The U.S. and Brazil, the world'''s largest biofuels producers, strenuously defended their ethanol industries, which are produced from corn and sugarcane respectively. "It offends me to see fingers pointed at biofuels, when the fingers are coated in oil and coal," said Brazilian president, Lula Inacio Lula da Silva. U.S. agriculture secretary, Ed Schafer, reinforced his previous claim that biofuels had accounted for just 3% of global food prices over the last year, which triggered irritated responses from other representatives.[14]
Better biofuels are a mantra for many leaders at the 151-nation June 3-5 summit. French President Nicolas Sarkozy said developing them should be an "absolute priority". The summit is considering a draft declaration that would urge more research into non-food biofuel crops, such as jatropha trees, and "second-generation technologies. which are focused on cellulose from stalks and leaves rather than food sources". Such new fuels would shift away from crops such as corn, wheat, maize, soya, palm oil or sugar, blamed for driving up food prices alongside factors such as a rising human population, changing diets, high oil prices and bad weather. "For these new technologies to be commercially viable it will take more than five years, but less than 10," said U.S. Agriculture Secretary Ed Schafer, more optimistic than the FAO and the OECD report. He said he had visited a plant in Florida trying to generate fuel from orange peel.[5]
"Most objective observers feel that the demand from the biofuels sector accounts for anywhere from one-third to two-thirds of the explosion in food prices, not the two or three percent suggested by Secretary Schafer," said Dr. Thomas Elam, president of FarmEcon LLC. "Crops that used to be grown for food production are now being priced at their value as a fuel supplement, with unpredictable and very negative consequences for the food economy. The costs of those crops to the U.S. food production system are also being significantly increased by federal biofuels policy." Schafer's "two or three percent" estimate echoes the comments of Edward P. Lazear, chairman and, at this time, the only member of President Bush's Council of Economic Advisers.[15]
