King Corn wins battle at UN
http://www.theglobeandmail.com/servlet/story/LAC.2 [2008-6-13]
Tag : Egyptian Rice
Commodities analysts said corn would have taken a dive had thesummit's biofuels fight gone the other way.
To be sure, the food summit had its good points. It was the biggestgathering of its kind since the early 1970s, the last time faminewas mentioned in the same breath as rising food prices.
The Rome summit certainly raised global awareness about prices,malnourishment and the threat of starvation. Forty-four heads ofstate and government, from Albania to Zimbabwe, showed up. So didWorld Bank president Robert Zoellick and Dominique Strauss-Kahn,managing director of the International Monetary Fund. Billions ofdollars in food aid were pledged. The summit ensured that foodsecurity will move to the forefront of the summer's G8 summit inJapan.
The bad news? It was a summit only in name. The event could havebetter been described as a sales convention, as if each country hada booth to hawk its own agriculture policy and badmouth thecompetition.
There was Brazil, defending sugar cane ethanol as an environmentaland economic miracle while denouncing the corn-based version soadored by the U.S. and Canada. In another booth, Egyptian PresidentHosni Mubarak was complaining about food prices while insisting ondoing his bit to ensure painfully high rice prices by imposing anexport ban on Egyptian rice.
Down the aisle was Josette Sheeran, the executive director of theWorld Food Program, the world's biggest emergency food agency. Shewas thanking donor countries for the $1.2-billion funnelled intothe WFP since March to fill a food procurement budget depleted byrecord prices for wheat, rice and other staples. But would shedenounce biofuels for clobbering her buying power even though everydelegate at the summit agreed the food-to-fuel surge has had atleast some role in pushing up food prices? Forget it. Her reticencemight have had something to do with the fact that ethanol-crazedAmerica is the WFP's biggest donor (Canada, another ethanol junkie,is third).
The snazziest sales booth in the joint was run by Ed Schafer, theU.S. Agriculture Secretary. Call him Mr. Ethanol. The man expertlydefused the anti-biofuels time bomb. He said the world can havegreat heaps of both biofuels and food, and claimed that ethanolaccounts for no more than 3 per cent of the recent increase in foodprices. The figure is, at best, optimistically low. TheInternational Food Policy Research Institute of Washington, aresearch group funded by governments, puts the figure at 30 percent. Other estimates are as high as 60 per cent.
Mr. Schafer's hard-line position put the UN Food and AgricultureAgency (FAO), the summit's sponsor, and the delegates of 181countries in a bind. A declaration condemning biofuels, or evendemanding they no longer be subsidized - the UN says developedcountries last year pumped $11-billion into biofuel support - wouldalienate the Americans. They could retaliate by killing the finaldeclaration, withholding funding to the three UN food agencies inRome, or both.
In the end, predictably, the declaration did nothing more than callfor more "studies" on biofuels' effect on food security. Thesubsidies will remain in place. So will government mandates ofbiofuel content in gasoline and diesel (Canada is bringing in a5-per-cent ethanol content rule for gasoline) and import barriers(the U.S. imposes a hefty tariff on sugar cane ethanol fromBrazil).
Worst of all, so will the upward pressure on food prices because ofthe diversion of land from food to fuel crops. In a food-scarceworld, even the loss of 5 per cent of the arable land to food cropscan push up prices significantly. In the European Union, as much as15 per cent of the land will have to be devoted to biofuels ifcontent mandates are to be met.
You have to feel sorry for the poorest countries. They expected thedeveloped world to do a little more than fling guilt money at theproblem. They left the summit frustrated and more than a littleafraid that food will get scarcer before it gets plentiful, if itgets plentiful. But they learned something. They learned theAmerican corn farmer is the biggest power of them all.
Commodities analysts said corn would have taken a dive had thesummit's biofuels fight gone the other way.
To be sure, the food summit had its good points. It was the biggestgathering of its kind since the early 1970s, the last time faminewas mentioned in the same breath as rising food prices.
The Rome summit certainly raised global awareness about prices,malnourishment and the threat of starvation. Forty-four heads ofstate and government, from Albania to Zimbabwe, showed up. So didWorld Bank president Robert Zoellick and Dominique Strauss-Kahn,managing director of the International Monetary Fund. Billions ofdollars in food aid were pledged. The summit ensured that foodsecurity will move to the forefront of the summer's G8 summit inJapan.
The bad news? It was a summit only in name. The event could havebetter been described as a sales convention, as if each country hada booth to hawk its own agriculture policy and badmouth thecompetition.
There was Brazil, defending sugar cane ethanol as an environmentaland economic miracle while denouncing the corn-based version soadored by the U.S. and Canada. In another booth, Egyptian PresidentHosni Mubarak was complaining about food prices while insisting ondoing his bit to ensure painfully high rice prices by imposing anexport ban on Egyptian rice.
Down the aisle was Josette Sheeran, the executive director of theWorld Food Program, the world's biggest emergency food agency. Shewas thanking donor countries for the $1.2-billion funnelled intothe WFP since March to fill a food procurement budget depleted byrecord prices for wheat, rice and other staples. But would shedenounce biofuels for clobbering her buying power even though everydelegate at the summit agreed the food-to-fuel surge has had atleast some role in pushing up food prices? Forget it. Her reticencemight have had something to do with the fact that ethanol-crazedAmerica is the WFP's biggest donor (Canada, another ethanol junkie,is third).
The snazziest sales booth in the joint was run by Ed Schafer, theU.S. Agriculture Secretary. Call him Mr. Ethanol. The man expertlydefused the anti-biofuels time bomb. He said the world can havegreat heaps of both biofuels and food, and claimed that ethanolaccounts for no more than 3 per cent of the recent increase in foodprices. The figure is, at best, optimistically low. TheInternational Food Policy Research Institute of Washington, aresearch group funded by governments, puts the figure at 30 percent. Other estimates are as high as 60 per cent.
Mr. Schafer's hard-line position put the UN Food and AgricultureAgency (FAO), the summit's sponsor, and the delegates of 181countries in a bind. A declaration condemning biofuels, or evendemanding they no longer be subsidized - the UN says developedcountries last year pumped $11-billion into biofuel support - wouldalienate the Americans. They could retaliate by killing the finaldeclaration, withholding funding to the three UN food agencies inRome, or both.
In the end, predictably, the declaration did nothing more than callfor more "studies" on biofuels' effect on food security. Thesubsidies will remain in place. So will government mandates ofbiofuel content in gasoline and diesel (Canada is bringing in a5-per-cent ethanol content rule for gasoline) and import barriers(the U.S. imposes a hefty tariff on sugar cane ethanol fromBrazil).
Worst of all, so will the upward pressure on food prices because ofthe diversion of land from food to fuel crops. In a food-scarceworld, even the loss of 5 per cent of the arable land to food cropscan push up prices significantly. In the European Union, as much as15 per cent of the land will have to be devoted to biofuels ifcontent mandates are to be met.
You have to feel sorry for the poorest countries. They expected thedeveloped world to do a little more than fling guilt money at theproblem. They left the summit frustrated and more than a littleafraid that food will get scarcer before it gets plentiful, if itgets plentiful. But they learned something. They learned theAmerican corn farmer is the biggest power of them all.
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