Food for Fuel?

Having lived through three decades of debates about ethanol, I can attest that the critics of biofuels have often warned of a coming food crunch as a result of the competition for inputs needed to produce both food and fuel. One of the most memorable such predictions arose in 1980, during my second term in Congress, in the form of a Worldwatch Institute pamphlet entitled "Food or Fuel: New Competition for the World's Cropland." I was among those who rebutted the argument, which was authored by Lester Brown, and predicted that U.S. farmers and technology would more than keep pace with demand not only for food and feed but also for fuel. Over the next several decades, the doomsayers were proved wrong: productivity gains for corn averaged nearly three percent per year, and the annual U.S. corn crop increased from approximately seven billion bushels in 1980 to nearly 12 billion bushels in 2006. During most of that time, corn prices were far below the actual costs of corn production, and taxpayers spent billions in direct payments to farmers in order to maintain the nation's "cheap food" policy. Last year, the Worldwatch Institute released a report warning of the potential effect of biofuels on food but highlighting, above all, their benefits for farmers and the climate.

In August 2005, President George W. Bush signed the Renewable Fuel Standard Program into law, and U.S. ethanol production is now expected to approach eight billion gallons by next year. As the public's attention has begun to focus on the need for alternatives to oil, the major oil companies have become concerned. Unsurprisingly, warnings of a looming food-fuel tradeoff have crept back into the national debate.

Yet I am convinced that just as the crunch never came during the past 25-plus years, it will not come now.

A recent analysis of the Bureau of Labor Statistics' food pricing data by the National Corn Growers Association showed that annual inflation for a basket of corn-intensive foodstuffs, such as dairy products, chicken, and pork, was less than general annual food inflation. And so even though the price of yellow corn in the United States has gone from $1.98 per bushel in January 2006 to $3.76 per bushel in March 2007, the increase has not been passed on to U.S. consumers of products such as milk, cheese, chicken, and pork.

There are a number of possible reasons for this (none of which Runge and Senauer cite). One of them is that only about five percent of the U.S. corn crop is used directly for human food; much of the remaining 95 percent is used to feed livestock. Another reason is that ruminant animals, such as beef and dairy cattle, get more nutritional value out of feed made from ethanol coproducts than out of other feed. The benefits are less great for monogastric animals, such as swine and poultry, but the market can still get the most bang for the bushel by converting the starch in corn into ethanol and then using the protein coproducts from ethanol plants for ruminants' feed rations.

To be sure, short-term market gyrations will require adjustments, as was the case in response to the recent hikes in prices for tortilla flour in Mexico cited by the authors. But this will be a short-lived challenge because the market will rapidly respond to the increased demand for corn by encouraging farmers to plant more of it. The U.S. Department of Agriculture estimates that there will be as many as 90 million acres of corn planted this year in the United States and tens of millions of acres more planted in South America and elsewhere. If history is any indication, productivity per acre will increase year after year as technology improves the characteristics of seeds, including their starch content and ability to ferment. And in the medium term, of course, feedstocks other than corn, including nonfood cellulose, will become increasingly important as inputs for biofuels.

The legislation promoting a low-carbon fuel standard now being considered by Congress will attract investment for next-generation facilities that convert animal waste and other waste (replacing fossil fuel inputs) into biogas and biofertilizers. As energy costs rise, farmers will increasingly rely on low- and no-till cultivation techniques. And as their incomes improve, they will have more capital available to employ other environmentally friendly techniques. An acre of corn, one of the rare plant species to use a carbon-dioxide-efficient photosynthesis system, removes more carbon dioxide from the atmosphere than does an acre of mature Amazonian rain forest, and next-generation biofuel technologies -- including those using nonfood cellulosic feedstocks -- will increasingly contribute to the critically important goal of reducing, as the author Michael Pollan has put it, humans' "carbon footprint."

Next-generation feedstocks in other countries will also be important. Runge and Senauer sound the alarm about the potential use of cassava -- an important foodstuff -- for biodiesel, but cassava is far from being the most promising feedstock for biodiesel in developing countries. In fact, oil from jatropha, a nonfood plant that grows in wastelands, is widely used in India, where it is the main ingredient in the 15-20 percent biodiesel fuel that powers the trains running from New Delhi to Mumbai. According to the Energy and Resources Institute in New Delhi, a hectare of jatropha can produce four times as much fuel as a hectare of soybeans. Other countries, such as the Dominican Republic, Haiti, and several African states, have begun to sow jatropha for future use in biodiesel.

Like at no other time in history, the planet faces energy and climate crises. Resolving them will require a comprehensive and well-reasoned set of policies. Those choices must be based on sound analysis -- not hyperbole and the hollow recitation of discredited doomsday prophecies.