Casaubon's Book

A couple of years ago, I wrote a post with the above title, about the way that biofuel and meat production in the US was pushing up world food prices. I observed, as has been documented in any number of studies, that when the world’s poorest people and the world’s richest people’s vehicles (or their pets, to their appetite for grain fed meat) compete for food, the cars, pets and rich folk always eat first – the rich come to the table once for their share of staple grains, then three of or four more times for more grains in the form of meat. We then come to the table again for a share for meat for our pets, and now two or three more times for a share for grain for our cars. Only after we have sated ourselves on meat, our pets have done the same and our cars have sated themselves on biofuels do the world’s poor get to come and eat a little grain. Or if the grain is gone, or its price risen out of reach, they fill their bellies with what they can find – the dirt in the title refers to “cookies” made out of clay that Haitian people were eating to quiet their misery because they could not afford enough food to live.

In 2008, as Aaron Newton and I document in _A Nation of Farmers_ prices for grain rose precipitiously around the world. In the US, the price of rise rose by 30%. In places like Haiti, where the majority of the population already spends more than 60% of their income on food, the price rises amounted to 300%. Even the price of the dirt for the cookies rose, out of the reach of some of the most desperately poor.

The news has been quieter about biofuels in the last few years, and grain prices have descended some since their meteoric rise in 2008, on the heels of the depression. The speculative bubble and high energy prices that fueled the price increases have declined somewhat. It would be easy to think that the problem had disappeared. But this is not true. The USDA’s 2009 data reveals that fully 1/4 of all the grain produced in the US went into our cars, while more people (in excess of 1 billion) went hungry than ever before in human history.

This is tragic for a whole host of reasons. Biofuels are antithetical to our attempts to stabilize the climate – ovewhelmingly they are produced from corn, a heavy feeder that produces more emissions than it saves. At best, the Energy return over energy invested for corn-based ethanol is extremely small – you use one barrel of oil to get 1.35 barrels of ethanol. And most importantly, the transformation of food into fuel pushes up food prices for both the 1 in 9 Americans who now requires food stamps and for the 1 billion world hungry.

According to Brown, the growing demand for US ethanol derived from grains helped to push world grain prices to record highs between late 2006 and 2008. In 2008, the Guardian revealed a secret World Bank report that concluded that the drive for biofuels by American and European governments had pushed up food prices by 75%, in stark contrast to US claims that prices had risen only 2-3% as a result.

Since then, the number of hungry people in the world has increased to over 1 billion people, according to the UN’s World Food programme.

“Continuing to divert more food to fuel, as is now mandated by the US federal government in its renewable fuel standard, will likely only reinforce the disturbing rise in world hunger. By subsidising the production of ethanol to the tune of some $6bn each year, US taxpayers are in effect subsidising rising food bills at home and around the world,” said Brown.

“The worst economic crisis since the great depression has recently brought food prices down from their peak, but they still remain well above their long-term average levels.”

Back just two years ago, I was quoting this, which bears consideration again, I think, as world eyes are fixed on Haiti. It is noble and good to respond to Haiti’s immediate crisis. But it is immoral to respond to one disaster, while enabling another, more permanent one. So consider the story of those who come to the table after the cars have eaten.

Consider this story, about Haitian people who cannot afford even the most basic staple foods are literally eating dirt:

http://news.yahoo.com/s/ap/20080130/ap_on_re_la_am_ca/haiti_eating_dirt;_ylt=At.SCYedMcllZmKLaFqaJqBw24cA

“When my mother does not cook anything, I have to eat them three times a day,” Charlene said. Her baby, named Woodson, lay still across her lap, looking even thinner than the slim 6 pounds 3 ounces he weighed at birth.”

And,

“I’m hoping one day I’ll have enough food to eat, so I can stop eating these,” she said. “I know it’s not good for me.”

Comments

  1. #1 Scrabcake
    January 26, 2010

    I think it’s a faulty assumption to imply that if grains were not used for pets, cows, and cars for the rich they would be exported at a low price to countries like Haiti. There are many many other intervening factors preventing that from happening, not the least being that haiti is run on the street by gangs and in theory by a government that probably couldn’t organize the distribution of grains. It’s a false dichotomy meant to guilt the first world into giving up meat biofuels etc. There are good reasons to give these things up, so we don’t need to trump up false ones.

  2. #2 Sharon Astyk
    January 26, 2010

    I didn’t say that, though, Scrabcake. I didn’t claim that the grains would be exported to Haiti as food aid – I didn’t mention food aid at all.

    What I claimed (accurately, there’s plenty of research on this) is that reducing pressure on grain supplies eases up prices. There are certainly plenty of problems in Haiti to go around – and no magical cure. But when we drive up prices for food, poor people starve. It isn’t at all a complex equation. Indeed, as the article in question points out, we subsidize ethanol which then drives up our food prices – so we pay twice, once for the gas and once at the grocery store. This doesn’t work out well for anyone. It isn’t good for farmers, either, who get an increasingly tiny portion of the price of their corn, and who go through boom and bust cycles regularly.

    The most desperate people in the world now are urban dwellers, many of them pushed off their land by globalization, who can no longer grow food, but must buy it at fluctuating market prices. At a minimum, the rest of us can do as little as possible to make their food unaffordable to them.

    Sharon

  3. #3 Sarah Worrel
    January 26, 2010

    I know this doesn’t fix what you’re talking about, Sharon, but it will help feed the Haitians. http://www.freerice.com has SAT prep games that teach math, vocab, and other skills. For every correct answer, 10 grains of rice are donated by the sponsors. It is a lot of fun. For a poor college student it is also a way to help.

  4. #4 Left_Wing_Fox
    January 26, 2010

    What I claimed (accurately, there’s plenty of research on this) is that reducing pressure on grain supplies eases up prices.

    Cheap grain can be as much a problem as it is a solution:

    http://www1.american.edu/TED/haitirice.htm

    Cheap grain prices caused by subsidized foreign competition has destroyed much of the domestic production of grain. Higher grain prices could have meant that domestic production could serve as a source of exported wealth. Whatever the problems with current biofuel technology (I hold out hope for sugar fuel cells though), international trade practices have a much stronger effect.

    Keep in mind, much of this destruction of the Haitian rice production happened in the 80′s long before biofuels ever entered into the picture.

  5. #5 Carol
    January 26, 2010

    It’s another reason to expand our home gardens.

    Because most of us *can* pay higher prices for food (even if we’re not happy about it) as prices rise we take food out of the mouths of those who have less money. I think I first heard this idea from Vandana Shiva.

    Every bit of food we grow ourselves reduces the world demand for purchased food.

    Thanks for helping me get fired up again about the garden in the midst of a dreary winter here in the UK.

  6. #6 Jen
    January 26, 2010

    There’s actually been a good program running about the cost of our industrial system to third world countries. Too bad they don’t play it on a prime network.
    http://planetgreen.discovery.com/tv/blood-sweat-takeaways/

  7. #7 Jen
    January 26, 2010

    There’s actually been a good program running about the cost of our industrial system to third world countries. Too bad they don’t play it on a prime network.
    http://planetgreen.discovery.com/tv/blood-sweat-takeaways/

  8. #8 mmerritt
    January 26, 2010

    “you use one barrel of oil to get 1.35 barrels of ethanol.”

    Well, according to the Yale Journal of Industrial Ecology, Jan. 2009, that’s not true:

    “Ethanol-to-petroleum output/input ratios ranged from 10:1
    to 13:1 but could be increased to 19:1 if farmers adopted
    high-yield progressive crop and soil management practices.”

    That’s a far cry from 1.35:1. Many “facts” being circulated about ethanol warrant a closer look.

  9. #9 mmerritt
    January 26, 2010

    Also the “record high” corn price in 2008 was about $8 per bushel, an absurd price. Since then, corn prices have dropped to about $3.50, even though ethanol production has increased substantially. Have food prices shown a comparable drop? No.

    That World Bank report has been proven false. Grain price shot up because investors were fleeing the conventional market and shoving everything the had into commodities (look at the timing relative to when the recession began and what was happening to the stock market). It was a completely fabricated price increase.

    On top of that, oil hit $140 per barrel, drastically increasing cost of production for farmers.

    And those are just a couple factors.

    It’s simplistic and irresponsible to just pin the blame for $8 corn on biofuels when we’re producing more today and price is less than half of what it was. World Bank’s report didn’t have the luxury of 20/20 hindsight. It came out in the midst of the problem. Now we have that luxury, and it’s pretty clear there was a lot more going on.

  10. #10 Gray Gaffer
    January 26, 2010

    IIRC, the only reason we have the crunch on corn is because itus use as a biofuel is politically mandated by our dear congress-critters. as part of the corn subsidy. Corn is one of the worst biofuels. Brazilian sugar cane os better by nearly an order of magnitude, but of course they are dastardly commies (or something) so we can never acknowledge them as a fuels source.

  11. #11 Sharon Astyk
    January 26, 2010

    Gray Gaffer, agreed, although it is unlikely that the US could duplicate Brazil’s sugarcane ethanol effects for two reasons. First, they use 1/8 the liquid fuels we use, and second, a much larger portion of their nation is suited to the cultivaton of sugar cane than ours.

    MMerritt: I assume you are speaking of the Cassman and Erickson study from U Nebraska. I’m aware of their study, and it certainly represents the outside range of EROEI – they find not quite what you seem to claim but that it could range up to 1.8 to 1. There are a couple of reasons to be critical of this study – the most important being they assume that all ethanol is actually produced using the least energy intensive methods, which, given a review of plants, isn’t the case. But yes, if the results can be duplicaetd, it makes a marginally better case for ethanol – not good enough to be really relevant, given teh scope of emissions reductions required, but hey.

    As for the claim about food price speculation, this is true – and if you think that the biofuel boom and markets it created had nothing to do with fueling the speculative market I’ve got a bridge to sell you.

    Sharon

  12. #12 MMerritt
    January 26, 2010

    They have 1.8:1 net energy ratio, if that’s what you’re talking about. You said a “barrel of oil”, when really petroleum inputs are minimal, as I pointed out with an exact quote from the study. And that study is not the outlier. Petroleum vs. energy in general is an important distinction. To say that 1 barrel of oil yields 1.35 barrels of ethanol implies that very little liquid fuel is displaced, when in fact the opposite is true.

  13. #13 MMerritt
    January 26, 2010

    As for food prices, “I’ve got a bridge to sell you” isn’t much of an argument against the points I made, but OK.

    I do think biofuels have helped sustain the $3.50-$4 corn prices we’ve seen over the last few years. The 2008 spike to $8 had absolutely nothing to do with biofuels, even though that’s when everyone started hollering about it.

  14. #14 MMerritt
    January 26, 2010

    And that study doesn’t imply the least intensive measures. It simply says that when you’re estimating the future impact of biofuels, you have to account for the fact that new capacity is more efficient and less polluting than old capacity. You assume that a new ethanol plant won’t be built to the standards of a 1986 coal-fired plant, but rather will have energy efficiency close to what newer plants have.

  15. #15 dewey
    January 26, 2010

    There is no January issue of the Journal for Industrial Ecology (“Yale” is not part of the name). The claim derives from an article by Liska et al. from the February issue (full paper available online), of which Cassmann and Erickson are two co-authors. The abstract does make the quoted claim about output/input ratio. However, in the paper the authors note the use of a “seed-to-fuel life cycle boundary” that is justified with reference to the fact that this is the basis for GHG reductions under certain regulations, not to science.

    I suspect that this analysis leaves out some of the upstream petroleum costs of corn production. The authors note that life cycle analysis includes upstream costs for fertilizer, tractors, etc., and these may be included for present-year production. However, the specified life cycle boundary definitely indicates that the energy costs for production of the seeds – last year’s crop grown, harvested, dried, etc. for the purpose of providing seeds for this year’s fuel-corn production – are entirely excluded. I am not sure that that is warranted.

    The abstract also follows the above claim with the statement that “An advanced closed-loop biorefinery … increased the net energy ratio to 2.2, from 1.5 to 1.8 for the most common systems.” The text adds that the net energy ratio goes as low as 1.29 in one of eight “scenarios.” Reduction in greenhouse gas emission is said to be 48-59% in most scenarios (going to 67% with a fancy setup, and under 20% when coal is used).

    So the upshot is that – based on the restricted considerations in their computer model – you indeed get back over 10 times more gallons of ethanol than you put in gallons of petroleum. BUT, even in that model the vast majority of production also uses enough other energy (natural gas or coal) that they are getting less than two barrels’ worth of energy out for each barrel’s worth of energy put in. It has been argued that a ratio less than 5:1 is too low to keep a high-energy civilization afloat.

    And there are other red flags in this analysis. First, the model includes “coproduct” reductions in GHGs and energy use that are deducted when a byproduct is used, as when distillers’ grains are put in animal feed – the rationale being that otherwise they would have bought some other manufactured product that would have used some amount of resources. Strikes me that there is room for fudging there.

    Second, the authors said the following:

    “Emissions from the indirect effects of land use change that
    occur in response to commodity price increases
    attributable to expanded biofuel production (e.g.,
    Searchinger et al. 2008) are not considered in
    our study, because such indirect effects are applied
    generally to all corn-ethanol at a national
    or global level and are not specific to a particular
    corn-ethanol biorefinery facility and associated
    corn supply.”

    In other words, the emissions reduction is certainly understated. The authors’ interest was in using acomputer model to discover differences in predicted efficiency among ethanol producers in different areas or using different methods. If ANY type of large-scale ethanol production might have knock-on effects that would end up increasing emissions, those consequences would be excluded. Now, I grant you those things are probably very hard to predict accurately. But the decision to ignore them (setting that value at zero) means that the authors’ calculations for GHG reduction are NOT applicable to the real world; they are definitely too generous, maybe by a large amount.

    *whew*

  16. #16 Brad K.
    January 26, 2010

    Sharon,

    I think that describing the world’s hungry – not just those in America, but all of them – in terms of the injustice of unnecessary hunger is proper. But I think a stronger argument can be made in terms of national defense. Hunger is a motivator for wars.

    Dewey,

    Your comment about “However, the specified life cycle boundary definitely indicates that the energy costs for production of the seeds – last year’s crop grown, harvested, dried, etc. for the purpose of providing seeds” fails to take into account – Monsanto has decreed, and the USDA enforces. That is, no one keeps back corn, except heirloom seed savers and small farm operations. You don’t have to buy seed corn from Monsanto – and I leave it to you, the difference in cost in energy, to have a single source and distribution network, for all agribusiness seed. OK, there are two other seed companies left in the corn business, but still.

    If you don’t buy seed corn from Monsanto, you pretty much have to establish analysis at the legal level, that what you do plant is completely and entirely free of any of Monsanto’s patented GMO DNA. And the cost of the seed went from $220 a bag last year, to $300 this year, according to one farmer’s anecdote. With a binding contract to comply with Monsanto’s patent protection procedures, before they will take your order for seed. There are lots of clouds on the horizon for food this year.

    And this year, like last year, the USDA’s mishandling of grain supply reports will deplete resources in the US to maintain exports of food – again, artificially playing games with food and people’s lives. Even through harvest last fall, the USDA was reporting record harvests at the same time they recorded 240 some grain-producing counties – as disaster areas, for shortfalls of at least 30% in at least one crop. Last year the USDA started out by overstating reserves of grains rather than the actual depletion of reserves. The US Department of Agriculture didn’t earn my trust last year.

  17. #17 MMerritt
    January 27, 2010

    January 2009, and yes, it’s owned and published by Yale.

  18. #18 MMerritt
    January 27, 2010

    A “barrels worth of energy” is misleading in that it implies some sort of direct connection with petroleum or liquid fuel inputs. You don’t measure natural gas energy in “barrels.” Please stop using that as your measurement.

  19. #19 MMerritt
    January 27, 2010

    Indirect land use change is a whole other debate, so I’ll leave that one for now. We’re talking about net energy, not emissions.

    This was a healthy debate, though. Thanks for your insight.

  20. #20 MMerritt
    January 27, 2010

    I work in the biofuels industry, so take that for what it’s worth. I just feel like people give short shrift to anything remotely positive about biofuels while extrapolating anything negative to unreasonable conclusions. I’m sure you feel the same in the other direction.

    One interesting thing I found yesterday while going through all this was a link provided by the journal’s editor: http://www.wiley.com/go/cornethanol. It’s the full series of articles (including some criticism and rebuttal of the study we’ve discussed).

    It includes an interesting editorial in which the editor a. takes issue with some of what I’ve said, and b. takes issue with some of what you’ve said (such as the reliability of Indirect Land Use Change measurement). It’s a good read if you have the time.

    Thanks again.

  21. #21 MMerritt
    January 27, 2010
  22. #22 dewey
    January 27, 2010

    BradK – the perfidy of Monsanto is beyond doubt. I was thinking of a different issue, that being that if you are growing corn for ethanol this year, wherever you get your seed, last year whole fields of corn were grown solely to provide the seed for this year’s ethanol farmers. The planting and cultivation of those fields took energy and oil, which it seems to me should be counted as a cost of ethanol production.

    MMerritt – The journal’s website says that the first issue is published in February, and that, though it is owned by Yale, Yale is not part of the name. It doesn’t matter who owns it nor what it’s called, except that the correct name will help others to find it if they’re so inclined.

    You obviously don’t follow discussions among energy-supply alarmists; those folks, including some in the oil industry, frequently use “barrels of oil equivalent”, abbreviated “boe”, to quantify total energy produced or consumed. This is both done as a convenience and probably to emphasize that, since actual oil provides more of our society’s total energy than any other fuel, if oil production declines much we will have a heck of a time making up the shortfall with natural gas and coal.

    The various fuels are at least imperfectly substitutable (all can be used to heat homes or power transport, under certain conditions), and it is worth sometimes thinking of all of them together simply as “energy.” A “gusher” oil well used to require as little as one barrel’s worth of energy to produce and make available 100 barrels of oil – practically free. If you have to burn one barrel of oil or the equivalent to get two barrels’ worth of oil out of tar sands, this makes the oil far more costly, and even if you were able to keep the output rate level using tar sands, the net energy actually available to non-energy industries and consumers would be essentially cut in half.

    Corn ethanol is the renewable equivalent of tar sands. Possibly its production does consume much less petroleum energy, specifically, than it returns in ethanol energy. But it also consumes a lot of coal and natural gas, which then are unavailable for other uses, and when you count those too, the net energy ratio is lousy. Certain other plants, grown in certain places, have a much better net energy return. Corn, even if you have no moral qualms about burning grain in gas tanks, is just not efficient.

  23. #23 Sharon Astyk
    January 27, 2010

    Wow, I feel like a movie cowboy “My work here is done” except I haven’t actually done any work, Dewey did it for me ;-). MMerritt and Dewey, thank you for creating such a fascinating and civil discussion. I do think that BOE is a useful measure, IMHO, although it does in some degree elide substitutability.

    MMerritt, you are right, “I’ve got a bridge” isn’t a great argument. I guess I find it kind of astonishing that anyone would argue that the possibility of creating a speculative bubble on food wasn’t shaped by the rapidly growing biofuels market, though. What other factor in the food market was in sufficiently rapid expansion to justify the presumption by the market that food prices would continue to rise? By early 2008, world meat consumption had already begun to decline a bit, and its rise simply wasn’t rapid enough to account for the presumption of continued, rapid growth.

    Sharon

  24. #24 dewey
    January 27, 2010

    Sharon – thanks! I suspect MMerritt may agree with me that the price of a commodity during a bubble need not be related to any real-life evidence that the commodity should be more valuable in future. Bubbles by definition happen when people with more money than sense start pouring money into something regardless of the fundamentals. Like for example, why has the stock market gone up 70% in the last year even though productivity has been flat? Because those people who still have lots of electronic wealth and are greedy for more have to buy SOMETHING.

  25. #25 Sharon Astyk
    January 28, 2010

    I would argue that bubbles mostly happen when there is a reason for price increases, and people go nuts beyond what there is a reason for. The stock market increase at present has a reason – and a compelling one. The government has poured enormous sums into the banks in large part to get precisely this result. In that sense, I don’t think it is a true bubble – that doesn’t mean it won’t burst like one, though.

    Sharon

  26. #26 gen
    January 30, 2010

    Great discussion on both sides!! Thanks to all (Sharon, MM, and Dewey). I just wish our politicians of both parties would work together eliciting facts and laying out their positions in such a courteous and factual way. People could then base their support of issues on substantitive data.

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