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Time: Why Biofuels Help Push Up World Food Prices

Author: Bryan Walsh
February 14, 2011

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Bryan Walsh argues that a combination of bad weather, economic growth, and biofuel production created record high food prices.

It's easy to miss amid the drama of Egypt though the two stories are connected but the world is in the grip of a full-blown food crisis. According to the U.N., world food prices hit a record high in January, meaning food is now more expensive than it has ever been in real terms since the U.N. first began tracking the numbers in 1990. Grains, in particular, are more expensive than ever, with corn prices up 53% in 2010, wheat up 47% and rice now at its highest level in more than two years. At a time when much of the global economy is still struggling to bounce back from the crisis of the past few years, high food prices could push millions back into poverty and cause millions more to go hungry. "The impact is really being felt, especially in outside the U.S.," says Marie Brill, the senior policy analyst at the antipoverty NGO ActionAid USA.

Less clear is what's actually behind the spike in food prices. Bad weather plays a major role a devastating heat wave in Russia last summer ruined grain harvests and prompted that country to suspend exports, jolting global markets. Excessive heat in the Midwest stunted the corn crop, leading to a 5% drop in production last year. Rising demand for food especially meat, whose production requires lots of grain and water in the richer parts of the developing world is straining supplies. And then there's ethanol, the production of which sucks up grain and cropland that could be used for food. In America, 40% of the corn crop is currently diverted to make fuel for cars. "Ethanol uses 4.9 billion bushels of corn in the U.S.," says Lester Brown, president of the Earth Policy Institute, an environmental think tank. "That's enough grain to feed 350 million people."

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