Sunday, May 13, 2007

Bio fuels to bring on the end of the world!

There have been a couple of reports on bio fuels recently giving warnings about the environmental damage they could cause.

Apparently they will starve the poor as the price of food goes up, lead to more widespread famines and cut down the rain forests all in one fell swoop, if we are not careful.

This all sounds perfectly plausible. However I am not convinced they are well thought through.

Firstly lets look at food pricing. In Europe food prices are distorted heavily upwards by the Common Agricultural Policy (CAP) making the poor pay more anyway, whilst the excess is then dumped on Africa so that Farmers there can't compete to grow their own food so starve. (America does similar in some agricultural sectors). The net result is that the poor can seldom afford food because they can't earn money farming.

If our farmers grew something useful and unsubsidised then I suspect the poor in Africa would be in a better position to earn a living and feed themselves. THE CAP and similar also play a part in causing famine by destroying native agriculture. In short a rise in food prices may help the poor as they will be the ones making money out if it. (I know this will not be universally the case but an economy generally starts by being able to feed itself before it can move on.)

Then there is the question of how much land bio fuels would need to use. Europe can already produce far in excess of what it needs to eat. The Ukraine could feed large parts of Europe on its own. The problem here is inefficient agriculture and growing things people do not want to buy.

That leaves the rain forests. There is no doubt that these are easy to exploit for agriculture, and that will require worldwide political pressure to stop. That said, that pressure should be sensitive to the fact that we are in effect punishing those who have still got their rain forests in favour of those who have already cut them down.

We should also be looking at what sort of technologies we can use to bring marginal land back into agricultural use. I am thinking here of the vast mass of desert that we have which is expanding at some rate.

These problems can be solved.

The BBC has this


Lucyp said...

From what i have heard (and i admit i have not been looking into this too hard)the concern is that half the farmers will stop farming food and start farming materials for the bio-fuel. Thus the food production will drop to below what is needed.
As i say, i have not looked into this too much and i am only passing on the concerns i have heard expressed.

Benedict White said...

Lucy, firstly they will at least be able to feed themselves, but crucially as the price of food crops rises then so does the incentive to grow them.

One of the problems with African agriculture is that cash crops aside, there is little incentive to grow them as they get subsidised stuff dumped on them from Europe and America.

If the dumping stops and the food price rises then there is money for the farmers in food crops. They will want to grow them.

Peter the Punter said...

It's a big topic, Benedict, but the CAP is as good a place to start as any.

It is a pretty open secret that it is an interference with the market which has no justification outside the realm of Franco/German politics. I believe the policy is best seen as war reparations by a different name. Its justification, if it ever had any, has long since eroded but like many a well-intentioned policy that is now counterproductive, it's not easy to abolish.

Bad economic practice breeds inefficiency and dependence, as CAP illustrates so well. Tony Blair (yes, him) made a spirited attempt to at least bring the matter into public discussion about a year ago but his efforts were brushed aside. There are no votes in opposing it, but plenty would be lost - in France anyway - by reforming it.

Looks like we're stuck with it, doesn't it?

Or rather, I should say that Africa is stuck with it, because it that continent which bears the cost of European and US protectionism in agriculture. We simply could not compete with African producers on a level playing field. If we suddenly had to, food prices throughout Europe would increase dramatically. That would cost a few votes, wouldn't it? Which Political Party is going to champion such a cause?

Gordon Brown has made much of his pro-Africa credentials and with some justification but I cannot see him advancing that continent's cause at the expense of his and his Party's future.

In such a context, debate about bio-fuels appears somewhat academic. We can afford it. They can't. We should bear the cost. They shouldn't.

Benedict, although I am usually classed as a leftie, you and I know we have much in common politically, especially in economic matters. Do we agree that this one area where the free-trade argument is unassailable?

Even with the right political will, it would take time to dismantle existng structures and ease the transition to a more open market. But you have to start somewhere and some time and like any bad habit, the longer it is left, the harder it becomes to alter.

Benedict White said...

Peter, we both clearly agree the CAP is bad for Europe and Africa, though it is worse for Africa.

I am not sure the CAP keeps food prices here down. Even so, it certainly costs us a fortune in tax. (Actually I heard a quote that said that the CAP puts £800 PA on a family food bill).

The question is would rising food prices help or hinder Africa. I think it is more likely to help. (Especially if we can get rid of the CAP)

What say you?

Lord Nazh said...

"We simply could not compete with African producers on a level playing field."

Considering the per capita of most people in Africa, the 'cost' incentive to producing food is not much of a factor.

If the African producers of food have much more capabilities than the UK, you would think that Africa would be a much better fed continent.

Aid to Africa (money, food) I agree hurts it immensly. The goverments in most African nations are not 'good' and the money/food never benefits the right people. By continuously propping up the governments (and somewhat the people) we (the US/UK/UN) keep the people/governments in these countries from helping themselves.

They see no need to develop economies or good agriculture because we will simply supply them.

Benedict White said...

Lord Nazh, I think you miss the point. An African can afford to work in the fields for $10 a day (In fact many of them live on far less than that), so their labour costs are far far lower than ours.

The problem they have is that both the EU and USA dump subsidised food in their markets making it uneconomic for them to produce food. This means that the poorest can't get on the first rung of the economic ladder, and then on to build wealth, educate themselves and then reform their government.

It is true that the way aid has worked in practice in the past has not worked. Their are aid projects which are considerably more subtle and are delivering good, but odd results, for example medium scale commercial lending has resulted in a boom of mobile phones in Africa which is helping to deal with corruption and is empowering people. See:

The Real Sporer said...

Maybe Michael Savage is right and liberalism is a mental illness. Depression. These people find something bad in all progress.

There is virtually no involuntary hunger in the western world, inclusive of Australia and New Zealand. There is, however, lots of hunger in socialist and most socialist countries.

So clearly, we should listen to the socialist liberals and adopt more socialism. Like the messed up health care system that afflicts you people.

Benedict White said...

The Real Sporer, *cough* First of all, I think the way liberalism is defined in the USA is not liberalism. Liberalism is about less rather than more state control.

I agree socialism is an issue, but then so is protectionism which is in part what we are talking about here, and in particular the way Europe and the USA subsidises its farmers dumping the waste in Africa.

As for the NHS, it isn't perfect, but it is also far from messed up.

peter the punter said...


There isn't a smidgeon of difference between our views on this.

When I said CAP keeps prices down, I was of course generalising. It keeps some countries' prices down in the short to medium term. Long-term it forces them up because that what market distortions always do in the long run.

I also agree broadly with Lord Nazh although I think he rather overgneralises. I wouldn't knock traditional aid, or charity, especially when well directed by institutions that know what they're about. What it can achieve however is tiny by comparison with commercial investment. This is something we covered pretty extensively on the earlier thread you referred to - - which I thought was as good a thread as I've seen on any blog for a long time.

Finally, I notice that on this blog was criticised by 'the excellent Roger' for its conservative bias. It's a Conservative's blog, for heaven's sake! What does he expect to find here - Leyton Orient supporters?!

It's not as if it's entirely conservative anyway. Some matters transcend Party Politics - this for instance - and it's nice to be able to find common ground amongst people of wide-ranging political views.

All the best (and I hope you have now recovered from your blisters.)

Benedict White said...

Peter, many thanks for your comments. Yes on some issues there is much common agreement.

One question I was wondering if you could answer. Would higher food prices help Africa?

On the issue, yes I am amused that some people might find an unannounced bias! Still I thought the Zimbabwe piece was funny!

Lord Nazh said...

Of course I was 'over' generalizing.

Charity is good, in all cases I have ever seen. I am not talking about charity though.

I'm talking about the fact that WE give Africa more than it needs to sustain itself. In turn, this makes the governments of said countries RELY on the aid they are getting and not developing home-grown agriculture/business.

No matter if the cost of food was more or less, the food we GIVE to Africa is the problem. As long as you give to people with no effort on their part, they will eventually rely on the giving instead of working.

See welfare in the US. What need to better yourself (or your country) if someone else will just give you what you need.

Benedict: You talk about the economic 'first' rung that these people can't get to because of subisidies. That's bunk. No matter what the prices are, the FACT that the people are starving tells you that they aren't producing enough food locally. Economics doesn't get into a local economy where the people have NOTHING already, survival does. The 'lowest' people are usually the first ones to do anything to survive, yet they aren't out planting? why? (war/aid/bad governments)

I'm sure I'm not getting my point across (it sounds much better in my head) but I hope you can at least figure out what I'm trying to say :)

Benedict White said...

Lord Nazh, I think we are roughly singing of the same hymn sheet.

Food dumping is causing more rather than less problems in Africa.

The whys and wherefores is where we seem to differ a bit.

The poorest who can't get work could if it was financialy viable to gorw food as then labour would be required.

Bad government also plays a massive part. However the only sure fire way of reforming government is to get more wealthy people who will then question what happens to their money (I am not talking about large amounts of wealth either) as they become both more educated and more aspirational.

None of this can happen whilst both our governments seem keen to tax us so that we can dump food on them keeping some of their agriculture down.

(Makes sense and sounds good in my head!)