How Ethanol Fuels the Food Crisis

Political protests and riots related to rising food prices have occurred in a number of developing countries including Egypt, Guinea, Haiti, Indonesia, Mauritania, Mexico, Morocco, the Philippines, Senegal, and Yemen. In response, several governments have increased food subsidies, imposed price controls, restricted exports, and cut duties on food imports. Russia has imposed a 40 percent tariff on wheat exports, essentially halting them. Argentina, normally a major wheat exporter, has slowed exports. Vietnam, usually the second largest rice exporter after Thailand, has banned rice exports at least until the new crop comes to market. These trade restrictions reduce the supply available on the world market and drive global prices of these grains even higher, aggravating global price instability.

Nearly a decade ago, we published an article in ("A Removable Feast," May/June 2000) calling attention to global food insecurity and warning that distractions from the role of trade and investment in poor developing countries could erase the positive impact that increased agricultural productivity has had when it comes to reducing global hunger. Biofuels have become just such a distraction, threatening both food security and the natural environment. It is now time for governments to respond, not with more trade distortions and subsidies, but by ending the failed policies that have created an artificial industry that is emptying the stomachs and purses of the world's poor.