Friday, December 28, 2007

The law of unintended consequences in action

The UN has warned that skyrocketing food prices threatens millions of people in poorer countries.

Food prices have risen an unprecedented 40% in the last year and many nations may be unable to cope, according to the Food and Agricultural Organization [FAO].

The increases are partly due to droughts and floods linked to climate change, as well as rising oil prices boosting demand for bio-fuels, the FAO said.

Changing diet in fast-developing nations such as China is also considered a factor, with more land needed to raise livestock to meet increasing demand for meat.

International cereal prices have already sparked food riots in several countries, the FAO points out.

The FAO is calling for increased funding for programs designed to help small farmers in at-risk countries.

The FAO's director general said the impact of biofuels on food prices would be examined next year.

The use of land to grow plants which can be used to make alternative fuels - and the use of food crops themselves for fuel - has reduced food supplies and helped push up prices.

This is a great example of the law of unintended consequences (though by no means the most devastating).

Much time and effort has been put into developing biofuels. This has been strongly pushed by corn- and soybean-growing places like the midwestern US and sugar-growing places like Brazil. Such lobbying is done clearly to benefit midwestern American and Brazilian farmers but they cleverly latch on the environmentalism and increasing concern about the already visible effects of climate change.

But there's one big problem: production of ethanol, the most common biofuel, uses more energy than the end product creates.

So not only does ethanol production waste energy, but it jacks up food prices for those who can least afford it.

1 comment:

Mark said...

Brain [sic], it's easy for you to criticize farmers, as you're not running a campaign in an election year in Iowa. :P