A variety of the mainstream media today are reporting on a confidential world bank report on the effect of Biofuels on food prices. The initial figures of a 75% increase appear large, but what do they actually mean? If we look into it we find that Biofuels are in effect concealing a massive increase in transportation costs hidden inside the family shopping budget.
From an outline of the World Bank report we get the following figures
Biofuels cause 75pc increase in food prices, report says - Telegraph
"The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertilizer prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period."
The report was drawn up in April but has remained unpublished prompting speculation that it had not been released to save President Bush from embarrassment.
I’ve worked this out in UK figures, but have checked it against several other countries prices, mileages and distances, and all work out to within 10% of the same figure.
Current family shopping budgets are worked out at £6250 per annum so with these figures the 2002 family shopping budget would work out at £2604 and the 75% increase attributable to biofuels works out at £1953 per year.
The average distance driven by a UK family is calculated at approximately 10,000 miles, so we’re talking about an increase of roughly 20p per mile travelled and if you factor in car mileage rates and a conversion to litres you’ll see that we are paying roughly an extra £7.37 per gallon. now that’s £1.61 for every litre of fuel brought during the year, at current food prices! ( 2.04 Euro) or if you want it converted to US prices that’s $14.60 per US gallon. So US consumers are paying European prices for Fuel, just hidden inside their shopping baskets These figures hold roughly the same in the USA even if you factor in US shopping patterns, annual driving distances, and vehicle mpg figures.
The US government argues that biofuels are responsible only for 3% of the increase in food prices, but even if you take that figure to be correct, that still means that there is an additional 56 cent per gallon charge hidden in the nations shopping baskets.
These insane figures will impact the poor disproportionately, a larger percentage of their income is used in buying food, plus for those too poor to afford a car, they are in effect subsidizing the lifestyle of the car driver.
BBC NEWS | World | Europe | Bioenergy: Fuelling the food crisis?
Food and Agriculture Organisation (FAO) Director General Jacques Diouf agrees.
He says it is incomprehensible that "$11bn-$12bn (£5.6bn-£6.1bn) a year in subsidies and protective tariff policies have the effect of diverting 100 million tonnes of cereals from human consumption, mostly to satisfy a thirst for vehicles".
It is a viewpoint shared by Oxfam's Barbara Stocking, who told the BBC News website: "It takes the same amount of grain to fill an SUV with ethanol as it does to feed a person. We don't want any more subsidies for biofuels. This rush to biofuels is absolutely dreadful."
We frequently see people kicking and screaming about a modest rise in the price of heating oils, or a minor rise in the price of car fuel. I understand that this will result in a few people will die from this as their budgets are stretched tight with the current economic situation, but removing 100 million tons of cereals from the market place to fuel cars is driving the price of food up to the point where far more vulnerable people will die from starvation and malnutrition effects.