As biofuel production ramps up, the price of energy crops that are also consumed as food will rise. This is clear already in the case of corn. Scenario planning conducted by researchers at the International Food Policy Research Institute predicts that it will also be true for many other crops, including cassava, sugar beet, wheat, and sugarcane.
The analysis is part of an avalanche of bioenergy and agriculture reports published by IFPRI in November. Biofuel geeks can and should plunder at will. But a companion article authored by Joachim von Braun , the director general of IFPRI and R. K. Pachauri, director general of The Energy and Resources Institute (TERI), titled "The Promises and Challenges of Biofuels for the Poor in Developing Countries," asks the $64,000 question: "Will crop production for biofuels compete with and drive out food production, thereby increasing food insecurity?"
Their qualified answer: Not necessarily.
Von Braun and Pachauri make a crucial point mentioned previously in biofuel coverage at How the World Works:
...It is now well understood that food insecurity is a result not simply of a lack of food availability, but poverty. Food-insecure people do not have the income to buy the food that is available. If increased production of biofuels can raise the incomes of small farmers and rural laborers in developing countries, it may in fact improve food security.
The authors also note that "research can -- and must -- help enhance overall crop productivity" so as to reduce energy crop pressure on food production. But that's exactly where things start getting tricky. Let's take a closer look at the IFPRI scenario planning. Scenario 1 assumes "aggressive biofuel growth without technological improvements." Scenario 2 assumes the development of cellulosic technology, a kind of holy grail for biofuel advocates that would greatly expand the available feedstocks (and diminish the appetite for food crops) for energy production. Scenario 3 includes, in addition to cellulosic technology, "the effect of investments in crop technology that would lead to increased productivity over time, in order to better support the expansion of feedstock supply in response to growth in biofuel demand."
In every case, prices for food crops will go up. But they will rise the least in Scenario 3.
The results show a "food-versus-fuel" trade-off in cases where innovations and technology investments are largely absent and where trade and subsidy policies are failing. In view of past agricultural policy, such a scenario cannot be ruled out, unfortunately, but it could certainly be avoided. This bleak picture changes considerably when biofuel and crop production technology advancements are taken into account. Although there is some uncertainty about the timing of eventual large-scale use of cellulosic conversion technologies for biofuel production, the potential benefits are well recognized in the literature, making a strong case for further research in that area.
IFPRI has long been associated with the advances in food technology that led to the much-debated Green Revolution, so it's no surprise to see the organization placing optimistic bets on new technologies. (Although it should be noted that many of the studies included in the Bioenergy and Agriculture omnibus pay close attention to the necessity for sustainable agricultural practices that are environmentally sound, including my favorite new phrase: "rational residue management.") What is troubling is that it seems clear from IFPRI's analysis that avoiding a negative trade-off between energy crops and food security will require two major steps: the speedy development of new technologies, and the careful management of their implementation so as to benefit poor farmers and rural laborers.
The problem is that those two requirements may be in direct conflict. If the recent past is any guide, new biotechnological innovations will be owned by private corporations (in contrast to the Green Revolution, where advances in crop breeding were mostly developed by government-funded institutions.) Another brief in the Bioenergy and Agriculture collection observes that "Private investment... threatens to result in the locking up of a large proportion of enabling technologies under various intellectual property protection mechanisms, as is already happening with, for example, critical enzymes in the biofuel production process."
Private investors rarely have the interests of poor farmers and rural laborers at heart, not to mention sustainable agricultural practices or environmental responsibility. If we're going to avoid a disaster in which corporate biofuel production results in surging food crop prices and environmental devastation, governments will be required to take a forceful leadership role. Left to itself, the market will undoubtedly wreak havoc.
If I seem, lately, to be more and more obsessed with biofuels, well, that's because it is the story that never stops giving. The tentacles of biofuels drag trade policy, intellectual property concerns, development economics, energy policy, climate change, sustainable agriculture, advanced biotechnology and the interplay between the government and the market into one gaping maw. That's good stuff.