This news report from the BBC claims that the UK is to slow expansion of biofuels amid fears they raise food prices and harm the environment. The news item refers to a UK government commissioned report, the Gallagher Report, saying that
It predicts that current policies could see grain prices in the EU rise by 15%, sugar by 7% and oil seed by 50%.
The review estimates that an extra 10.7 million people in India could find themselves in poverty, while countries such as Kenya, Malawi and Bangladesh could see hundreds of thousands affected. (Emphasis added)
Yet Labour and the Greens want to push ahead with mandatory biofuel uptake here in New Zealand. The BBC item also says that
Its report calls for biofuels to be introduced more slowly than planned until controls are in place to prevent higher food prices and land being switched from forests or agriculture.
Controls??? How exactly are controls going to prevent higher food prices? We have seen the effects of biofuel subsidies and mandates, higher food prices, greater poverty and greater environmental damage. How would even more controls effect any of this? Do the writers of the Gallagher Report really think that even greater controls in the UK will affect the world price of food? It is government controls that have caused the mess in the first place, removing these controls - the subsidies and the mandates - is the answer, not adding even more controls on. That will, most likely, just make the problem worse.
2 comments:
"Yet Labour and the Greens want to push ahead with mandatory biofuel uptake here in New Zealand"
I don't particularly agree with the policy, but I don't think that New Zealand introducing compulsory bio-fuels will push up the world price of food :)
"How exactly are controls going to prevent higher food prices?"
I agree that controls is a silly thing to say. They probably mean to say that they will wait for the current higher relative price of food to lead to increased production before introducing stronger biofuel measures. However, they have to say the word "control" so it sounds like they are doing something ;)
I take your point, but the marginal effect will be small, but positive. Also if we don't stop all countries mandating biofuels, which ones should be allowed to do it and which countries should not allow to use such policies? If we only allow small countries that can't effect the world price of food to do it, whats the point? Those countries wouldn't effect global warming much either. If we allow the big countries, which can effect global warming, to use these policies then they will also effect world food prices.
As to your second point, note that a number of food exporting countries have export bans in place so their framers don't receive the higher world prices and thus have no incentive to increase production.
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