SALON

Wednesday, May 30, 2007 4:26 PM UTC

A margarita made with ethanol

First, the biofuel industry came for my tortillas. But then, my tequila? And my beer? Is the apocalypse nigh?

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Topics: Globalization, How the World Works, Beer,

OK, now this biofuel thing has gone too far. Reuters is reporting that Mexican farmers are burning down fields of blue agave — the main ingredient in tequila — and replanting them with corn. Meanwhile, in Germany, the Associated Press warns that the price of beer is set to rise, because barley farmers, encouraged by government biofuel subsidies, are switching to rapeseed.

Tortilla price hikes are bad enough. But beer and tequila? How are we supposed to continue anesthetizing ourselves against the daily drumbeat of war, ecological disaster, poverty and injustice?

Maybe China, which has pretended in the past to be the ancestral birthplace of tequila, will pick up the slack.

Or maybe we should take a closer look at both these stories.

Reuters:

Production of agave, from the lily family, soared in recent years as farmers cashed in on record prices brought about by a shortage of the plant at the start of the decade.

Despite rapid growth in tequila drinking, especially overseas, the over-supply of agave has driven prices for the plant to rock-bottom levels.

Many growers have started to abandon the crop in favor of corn, whose price has rocketed in line with massive growth in U.S. demand for ethanol after President Bush outlined targets last year to use the corn-based fuel as a gasoline alternative.

The Associated Press:

Farmers say the brewers share some of the blame.

“For years there was an oversupply and we couldn’t make any profits with barley and that’s why we switched to biofuel crops,” said Anton Stuerzer, 43, who grows barley and rapeseed at his farm in the neighboring village of Hoehenkirchen.

“It serves the brewers right that they have to pay those high prices now — they should have paid us fair prices even when there was too much barley available.”

Not too hard to see the common thread here, huh? Depressed prices for agricultural commodities brought about by overproduction — a problem that has been plaguing farmers, especially in the developing world, for decades.

How the World Works noted just a few weeks ago that Mexican corn farmers, who have long suffered from their inability to compete with subsidized, highly efficient American corn farmers, would no doubt respond to high corn prices by boosting production. That, in turn, could have a long-term positive effect on the Mexican rural economy that might well balance, or even outweigh, the negative social impact of higher food prices. The same story could well be repeated throughout the developing world, where agriculture is responsible for a far greater share of economic activity than it is in the United States or Europe.

It is very easy to make a short-term, facile equation in which biofuel production results in food price hikes and therefore must be bad, bad, bad. But the real key to addressing global hunger is not to keep food prices low, but to make economies rich. Which means the real challenge for government policy-makers is ensuring that the benefits of higher prices for agricultural commodities are actually captured by small farmers and rural communities, and not by corporate agribusinesses. It’s not about food vs. fuel. It’s about equity vs. exploitation.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21. More Andrew Leonard.

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