Food Prices on the Rise

The rising price of food is noted everywhere and many blame the diversion of crops to biofuel. US Agriculture Secretary Ed Schafer and the Bush administration disagree, as they're pushing biofuels as an alternative energy source; from AP:

The Bush administration is defending its decision to push food-based biofuels as food costs rise at home and abroad, saying the renewable fuels are only a small part of the problem.

Some have blamed the food crisis in part on policies backed by the White House and Congress that divert corn, soybeans and other crops to fuel.
 
According to Department of Agriculture economists, higher corn prices increase animal feed and ingredient costs for farmers, ranchers and food manufacturers, but pass through to consumers at a rate less than 10 percent of the corn price interestingly

Interestingly enough, this article in the Nation seems to concur, suggesting it is policies by the WTO and the World Bank that are to blame:

When tens of thousands of people staged demonstrations in Mexico last year to protest a 60 percent increase in the price of tortillas, many analysts pointed to biofuel as the culprit. Because of US government subsidies, American farmers were devoting more and more acreage to corn for ethanol than for food, which sparked a steep rise in corn prices

The diversion of corn from tortillas to biofuel was certainly one cause of skyrocketing prices, though speculation on biofuel demand by transnational middlemen may have played a bigger role. However, an intriguing question escaped many observers: how on earth did Mexicans, who live in the land where corn was domesticated, become dependent on US imports in the first place?

That the global food crisis stems mainly from free-market restructuring of agriculture is clearer in the case of rice. Unlike corn, less than 10 percent of world rice production is traded. Moreover, there has been no diversion of rice from food consumption to biofuels. Yet this year alone, prices nearly tripled, from $380 a ton in January to more than $1,000 in April. Undoubtedly the inflation stems partly from speculation by wholesaler cartels at a time of tightening supplies. However, as with Mexico and corn, the big puzzle is why a number of formerly self-sufficient rice-consuming countries have become severely dependent on imports.

The concept of "food sovereignty" is considered an "alternate paradigm,"..."Farmers' groups have networked internationally; one of the most dynamic to emerge is Via Campesina (Peasant's Path). Via not only seeks to get "WTO out of agriculture" and opposes the paradigm of a globalized capitalist industrial agriculture; it also proposes an alternative--food sovereignty. Food sovereignty means, first of all, the right of a country to determine its production and consumption of food and the exemption of agriculture from global trade regimes like that of the WTO."

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Neil Crumpton, energy campaigner at Friends of the Earth, said that using biomass in power stations or combined heat and power schemes is a better use of the resource than, for example, turning it into liquid biofuels for use by diesel-engine vehicles.