Energy Subsidies

Biofuels: Starving Guatemalans to Feed Cars


Says it all.

The Sunday New York Times has a terrific article, "As Biofuel Demand Grows, So Do Guatemala's Hunger Pangs," detailing the unintended consequences of U.S. and European Union biofuels subsidies and mandates on poor people in Guatemala. Some excerpts:

Recent laws in the United States and Europe that mandate the increasing use of biofuel in cars have had far-flung ripple effects, economists say, as land once devoted to growing food for humans is now sometimes more profitably used for churning out vehicle fuel.

In a globalized world, the expansion of the biofuels industry has contributed to spikes in food prices and a shortage of land for food-based agriculture in poor corners of Asia, Africa and Latin America because the raw material is grown wherever it is cheapest….

In 2011, corn prices would have been 17 percent lower if the United States did not subsidize and give incentives for biofuel production with its renewable fuel policies, according to an analysis by Bruce A. Babcock, an agricultural economist at Iowa State University. The World Bank has suggested that biofuel mandates in the developed world should be adjusted when food is short or prices are inordinately high.

Instead of "adjusting" mandates, let's just eliminate them entirely. Of course, Reason has long been opposed to subsidies and mandates for the production of biofuels. (Reason is, in principle, against distorting markets by any subsidies, period.)

Back in 2007, i reported in my column, "Feed SUVs and Starve People?," that Federal subsidies and mandates were increasing the prices of grain making it harder for poor people to feed their families. In particular, bioethanol subsidies and mandates boost the price corn which is used to feed livestock. In addition, subsidies and mandates push up the price of other agricultural products because…

… farmers choose to plant less of them. For example, the U.S. Department of Agriculture projects that farmers will boost corn acreage from 80 million in 2006 to 94 million acres this year. Most of the increased acreage devoted to corn will come from reduced soybean acreage. Fewer soybeans means translates into higher prices.

Futhermore, an analysis by the International Food Policy Research Institute (IFPRI) projected by 2020…

…that corn prices will go up 23 percent, wheat, 16 percent, cassava, 54 percent, and sugar cane, 43 percent. If there is no cellulosic ethanol breakthrough and crop productivity increases at the current rate, the price of corn would increase 41 percent, wheat, 30 percent, cassava, 135 percent, and sugar cane, 66 percent.

Another way to look at the issue is that…

…it takes 450 pounds of corn to make enough ethanol to fill a 25-gallon gas tank. Four hundred and fifty pounds of corn supplies enough calories to feed a person for one year. The USDA projects that in 2010 the ethanol industry will consume 2.6 billion bushels of corn. A bushel weighs 56 pounds, so a quick calculation yields the result that 2.6 billion bushels of corn could supply enough calories to feed nearly 325 million people for a year.

Producing hordes of hungry people is no way to protect the natural environment.

NEXT: Sen. Vitter Calls Reid an "Idiot" for Downplaying Katrina Damage

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Small price to pay for liberals to feel good about themselves.

    1. There is no price too great to pay to achieve that.

  2. Starving people. Getting farmers to burn their agave crops in favor of biofuel crops like corn–thus threatening our precious tequila.

    I’m having trouble seeing how these atrocities are worth the marginal (if any) benefits of biofuels.

    1. Because Gaia or something.

    2. Stalin wishes he’d thought of this scheme.

  3. A bushel weighs 56 pounds, so a quick calculation yields the result that 2.6 billion bushels of corn could supply enough calories to feed nearly 325 million people for a year.

    This is why biofuels are immoral.

    1. Biofuels are not immoral. Using government coercion to force people into subsidizing and purchasing them is immoral. But if someone chooses to use fuel made from food, so be it. As long as the price is accurately determined by the market.

      1. Using government coercion to force people into subsidizing and purchasing them is immoral.

        This is a more accurate statement.

  4. “If they’d rather die, then they had better do it and decrease the surplus population. Good night, gentlemen”

  5. “Producing hordes of hungry people is no way to protect the natural environment.”

    Sure it is, if you are a bastard who wants to point to the terrible conditions to take more power for the state to deal with the “crisis”. Or you are a Malthusian green scumbag who feels Gaia is infested with humans who need removin’.

    1. Progressives have no regard for the poor unless doing so can further their ideological goals. Alternative fuels cost more. Higher fuel costs disproportionately hurt the poor. Which to choose, which to choose… Easy choice: No more fracking. No further drilling. Expensive wind farms and solar panels all around.

      Of course, the mandates right now aren’t about reducing emissions. But they initially rode into town on the backs of fake environmentalism, and that’s the continued selling point.

      1. Higher fuel costs disproportionately hurt the poor.

        That’s nothing that can’t be fixed by another wealth transfer program.

        Remember that as long a rich people exist, they will not have paid their fair share. I mean, how can a person be rich and also have paid their fair share? It’s not possible. The fact that they are rich is proof that they haven’t paid their fair share.

        Rich people can pay for it.

  6. Its like they start from the premise: “the world would be a better place if the five billion people least like me died without breeding”. Which is pretty much what I assume about orthodox environmentalists.

    1. The problem is that biofuels are very environmentally destructive. From cutting down forests to grow more biofuel crop to the negative energy return from producing them.

      Classical ethanol production using corn grain requires 29% more energy to produce than it provides. Ethanol produced using switchgrass cellulose requires 50% more energy than produced. Ethanol produced using wood biomass requires 57% more energy than produced (Pimentel and Patzek, 2005).
      Soybean and sunflower are used to create biodiesel. Biodiesel from soybeans uses 27% more energy than it produces. Biodiesel from sunflowers uses 118% more energy than it produces (Pimentel and Patzek, 2005).

      From here

      1. But it feels good! I mean, it feels good!
        That’s what really matters!

      2. Exactly. That’s why you can’t start from any premise in which they want the global environment to be more natural or for humans to have lower impacts.

    1. Why stop at $1 trillion?

      1. Well Krugnuts believes that “since the coin isn’t going to make it into circulation, it should not be inflationary.”

        What an incredible invention! WE CAN PRINT PROSPERITY!

        1. You mean WE CAN MINT PROSPERITY!

          1. Mmmm,…mint.

            1. Oh sir! It’s only a tiny little thin one.

          2. Oh that’s right, thank you LTC, that was the key part of the invention.

      2. Really why not $20 trillion, pay off our debt and buy nice boats for all Obama voters.

    2. Do yourself a favor and read the NYT comments section.

      1. Wow.

        Benjamin StocktonAlamo California
        Between a Rock and a Hard Place

        This is awful. On the one hand I feel the Pres should let them screw the country rather than have the social safety net held hostage. He could blame it all on the Republicans using a “throw the bums out” campaign in the mid-term elections. If he could get a Democratic majority in the 2014 elections, perhaps some of the damage of the default could be undone and a true progressive agenda implemented.

        Notice the location here.

  7. “Producing hordes of hungry people is no way to protect the natural environment.”

    But it achieves their other goal of reducing the population.

  8. Starving Guatemalans to Feed Cars

    I totally read that as “grinding Guatemalans up and using their liquified remains as automotive fuel”. Weird, right?

    1. Soylent High-Test is people!

  9. So who comes up with all that crazy stuff man?

Please to post comments

Comments are closed.