Sophia Murphy and her colleagues have produced an excellent report as part of the Commission on Food Security’s coordinated effort to respond to recent food price increases. The report, “Price Volatility and Food Security,” is one of several from the so-called High Level Panel of Experts (HLPE) to help inform the CFS’s fall meetings on the crisis. As Sophia points out in a recent post on the IATP blog, their report offers a strong challenge to the G20, which recently convened its agriculture ministers for a lackluster effort to take strong action to address volatility and food security. (See recent posts in our Spotlight G20 series.)
Among the intriguing findings in the HLPE report is the analysis of the evolution of demand for agricultural products and the dominant role that biofuels is playing in that demand. The authors rightly point out that while there remains some debate about the role of financial speculation in driving up food prices, there is near-consensus that biofuel policies, primarily in the United States and the European Union, are contributing significantly to price increases and that current policies to encourage biofuels use should be ended. The G20, of course, is only a reluctant part of that consensus.
The report, and Sophia Murphy’s blog post, are important contributions and worth reading. Here is a short excerpt from the report, which shows that despite continued claims that growing demand for meat in China and India is driving food and feed demand, the growth in demand for cereals, excluding biofuels demand, averaged 1.3% since 2000, only slightly higher than in the 1990s and slower than in the previous three decades. Biofuels demand added half a percentage point to that global demand.
Here’s the excerpt, from page 32:
The biofuel boom had a major impact on the evolution of world food demand for cereals and vegetable oils. Table 8 presents the growth rate of world consumption of cereals and distinguishes between feed and non-feed uses. It appears that, following a slowing down provoked by the collapse of the USSR, the acceleration of the world consumption growth between the 1990s and the 2000s was supported by the acceleration in the growth of both feed and non-feed uses.
The apparent acceleration of feed use in the last decade, however, is more linked to a recovery of feed use in the Former Soviet Union after the 1990s. It means that, even with the booming demand for meat in Asia, the growth of feed consumption outside the Former Soviet Union is not accelerating but is slowing down. Conversely there is a real acceleration of non-feed uses boosted by biofuel development. Excluding use for biofuel, the growth rate for non-feed use is stable compared with the 1990s and markedly inferior to its historical performance. Without biofuel, the growth rate of world cereal consumption is equal to 1.3 percent compared with 1.8 percent for biofuel.