Every time you start your car, you’re putting pressure on the world’s food supply.


The global food crisis became official this week when the United Nations (UN) called for urgent intergovernmental action and farming reforms to tackle the soaring food prices that are plunging millions of people into potentially deadly poverty.

The connection between your car and food prices begins with the rising cost of oil and gasoline.

It’s compounded by the fact burning gasoline produces greenhouse gas emissions, a major contributor to climate change. It’s further compounded by off oil policies that encourage switching to biofuels like ethanol (a grain alcohol produced from crops such as corn) as an alternative to gasoline.

The result is a decline in the supply of grains, as food crops are diverted to the production of biofuels. The problem is expanded by Asia’s increasing demand for meat which in turn diverts food crops to animal feed.

A UN sponsored study, compiled over three years by a panel of 400 experts is calling for more local food production using sustainable, natural and ecological farming methods, as well as safeguards to protect rapidly dwindling resources. It confirms that “diversion of agricultural crops to fuel is pushing up food prices and reducing our ability to alleviate hunger throughout the world". Wheat prices have risen by 130% since March 2007 and soybean prices by 87%. Last week, the World Bank warned that 100 million more people could be pushed into poverty because food prices had risen by 83% in three years.

Goldman Sachs says the cost of ethanol from corn is $81 a barrel (oil equivalent), with wheat at $145 and soybeans $232. Price is built on subsidy. New technology may one day open the way for the use of non-edible grain stalks to make ethanol but for now the only biofuel crop that genuinely pays its way is sugar cane at $35 a barrel (oil equivalent).

Sugar is carbohydrate: ideal for fuel. Grains contain proteins made of nitrogen - useless for fuel but vital for people.

The UN says it takes 232kg of corn to fill a 50-litre car tank with ethanol. That is enough to feed a child for a whole year. Last week, the UN predicted "massacres" unless biofuel policies are reversed.

We are all part of this drama whether we fill up with gasoline or ethanol. World grain stocks have fallen to a quarter-century low of 5 million tons, rations for just eight to 12 weeks. The United States will divert 18% of its grain output for ethanol this year, chiefly to break its dependency on oil imports. It has a 45% biofuel target for corn by 2015.

The UN Food and Agricultural Organization, which contributed to the report, said food represents 60 to 80% of consumer spending in developing countries, but just 10 to 20% in industrialized nations like Canada and the United States. In many countries, price inflation is forcing poor families to take children out of schools to go to work to help pay for food. According to the World Bank, 33 countries are now in danger of political destabilization and internal conflict as a result of food price inflation even though authors of the 2,500 page UN Report say the world produces enough food for everyone although 800 million people go hungry.

Growing populations combined with rising incomes will intensify food demand, especially for meat and milk, in turn requiring a larger share of the world’s crop-land for feed grains.

As wheat and rice prices rise, the unassuming potato is being rediscovered as a nutritious crop that could help feed an increasingly hungry world. In Peru, troubled by wheat prices that have doubled in the past year, they have started a program to encourage bakers to use potato flour to make bread. Apparently it tastes just as good as wheat bread.

China, a huge rice consumer has become the world’s largest potato grower. India wants to double its potato production. Developing countries are looking at the potato as both an income-generator and a hedge against food shortages.

The potato is already the world’s third most important food crop after wheat and rice. Corn, although widely planted is used mainly as animal feed and more recently for ethanol production. One thing that makes the potato affordable is the fact that it is not a global commodity and attracts little speculative investment. 17% of wheat production is exported around the world while less than 5% of potatoes are traded internationally.

Science is moving fast to increase the mobility and yield of potatoes. New Brunswick is a major potato producer. It would be ironic if one day our biggest export was the potato product and not a forest product.

W.E. (Bill) Belliveau is a Shediac resident and Moncton business consultant. He can be contacted at bill.bellstrategic@nb.aibn.com Atlantic Insight is a published Blog inventory of opinion articles published weekly in New Brunswick's print media as written by W.E. (Bill) Belliveau, who is a resident of Shediac, New Brunswick, and small business owner, operating his Moncton-based marketing consultancy, Bell Strategic. He can be reached by e-mail at mailto:bill.bellstrategic@nb.aibn.com