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Cicero Policy BrieferIssue 24, May 2008
Food vs. Fuel: Globalisation takes its toll
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| “Change must happen in small incremental steps which result in an eventual paradigm shift, rather than through top-down regulation” |
In a month where nothing has gone right for him, Prime Minister Gordon Brown has been forced to acknowledge that the use of biofuels may be affecting food prices just days after implementing the Renewable Transport Fuel Obligation, an agreement which requires petrol and diesel to contain a proportion of biofuels. After sharp criticism from charities and campaign groups such as Oxfam, the government must now urgently reconsider the value of using and producing biofuels, previously considered an ethically and environmentally friendly alternative to fossil fuels.
Transport Secretary, Ruth Kelly, was right to point out that “biofuels account for only some two per cent of total food production and that other international factors are involved”1, citing the influence of other contributing factors such as recent droughts, global population growth and an increasing demand for meat in preference to crops. However, such is the volatile nature of global markets that what seems a relatively small alteration at one end can be magnified into a seismic shift elsewhere. If the comparatively modest levels of biofuel production are already having an impact, then further growth in the sector should be checked, at least until the unintended consequences can be identified and circumvented. Unfortunately, so much has been put in train already that by 2010, ethanol production in the US is expected to account for 30 per cent of the corn crop. This will substantially reduce the land available for food crops and push up the price of cornflour on international commodity markets.
The price of wheat has risen by 130 per cent since this time last year, and other basic commodities, including rice, maize, milk and coffee prices are running at a 10-year high. As always, the most vulnerable are the first affected2. International Development Secretary, Douglas Alexander, summed up the effect in his pledge to give an additional £30 million to support the World Food Programme’s work in some of the countries most affected by food price inflation:
“Food prices have risen sharply around the world in recent months, causing serious social unrest and balance of payment problems for some countries and major funding gaps for humanitarian programmes. Most importantly, poor and vulnerable families across the world are struggling to buy enough food to meet the most basic needs.”3
While it is reassuring to see that the Government can still find the cash to throw at a problem, to an extent government intervention in this matter is not the answer. Over the past 30 years the price of basic foodstuffs has remained relatively constant, which means that in real terms the cost of many staples has fallen—clearly an unsustainable situation. Cheap food and commodities have led consumers in the UK, as in all developed countries, into behaviour characterised by over-acquisition and waste. This behaviour must change, and it must happen in small incremental steps which result in an eventual paradigm shift, rather than through top-down regulation which would cause resentment and instigate avoidance behaviour.
Consumer behaviour is beginning to change, as demonstrated by the recent demonisation of the plastic bag, but both retailers and consumers need to think responsibly about the type and amount of purchases they make and accept that while they may have to pay more for less, they should be able to get more from what they buy. And in getting value for money, rather spending one’s way to a solution, it should be the Government’s ambition to lead by example.
Stephanie Fraser can be contacted on +44 (0)20 7665 9531 or click here to email.
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By
Stephanie Fraser