The Great Agrofuel Swindle

In December 2007, the Energy Independence and Security Act passed the House and Senate, and was signed into law by President George W. Bush. The Act, legislated in the political glow of a strong bi-partisan consensus, mandates the use of 36 billion gallons of agrofuels annually by 2022—a five-fold increase over present levels. Politicians, both red and blue, are still gushing over the new green alternative, insisting agrofuels are vital to national energy security, will curb global warming, and are the next step in the nation’s transition from peak oil to a renewable fuel economy. Closer analysis reveals that agrofuels provide few of these benefits. In fact, they are already exacerbating problems of hunger, poverty and ecological destruction. In this case, renewable does not mean “sustainable.”

A report just released by Food First/The Institute for Food & Development Policy, based in Oakland, Calif., discusses the implications of the Renewable Fuels Standards (RFS) targets for agrofuels in the 2007 U.S. Energy Bill. The report, titled, “When Renewable isn’t Sustainable: Agrofuels and the Inconvenient Truths behind the 2007 U.S. Energy Independence and Security Act,” highlights growing hunger, energy dependency on the Global South and corporate control as three primary inconvenient truths of the Act.

The U.S. RFS mandate is affecting food prices and supplies around the world. It is estimated that half of the U.S. corn harvest will be diverted to ethanol production by the end of 2008. Because U.S. corn accounts for some 40% of global production, increased demand for U.S. corn as feedstock for fuel impacts global markets for corn as food. As acreage planted to corn increases, acreage for other food grains such as wheat and soybeans is reduced, raising the prices for these crops as well. People around the world are already experiencing the food price and supply shocks that the spike in U.S. ethanol demand and consumption is causing.

The International Food Policy Research Institute (IFPRI) predicts that depending on rates of agrofuels expansion, by 2020, the global price of corn will increase by 26 to 72% and the price of oilseeds between 18 and 44%. “In both scenarios, rises in crop prices would lead to decreases in food availability and calorie consumption in all regions of the world, with Sub-Saharan Africa suffering the most.” Countries where corn is the major staple grain will be particularly affected by rising grain costs.

Further, instead of offering energy independence and security, the 2007 Energy Bill actually reflects a bi-partisan, unspoken agreement to rely on imported agrofuels from the Global South. In 2006, imported ethanol accounted for 13.5% of ethanol used in the U.S., with Brazil being the major supplier. U.S. imports of Brazilian ethanol jumped from 31 million gallons to 434 million gallons from 2005 to 2006; a more than 10-fold increase. Growing dependency on agrofuels from the Global South is already leading to massive environmental destruction, loss of livelihoods and human rights abuses in agrofuels-producing regions of the South, and threatens economic and political instability in these regions.

Instead of offering energy independence and security, the 2007 Energy Bill actually reflects a bi-partisan, unspoken agreement to rely on imported agrofuels from the Global South. In 2006, imported ethanol accounted for 13.5% of ethanol used in the U.S., with Brazil being the major supplier.

To better understand the U.S. government’s agrofuels agenda, the brief analyzes how the industry is aiding market expansion and consolidation by the giant grain, biotech and oil companies. While the rest of the world is heading into economic recession, with the aid of taxpayer dollars, these corporations are expanding and making unprecedented profits. Archer Daniels Midland, the largest U.S. (and multinational) grain processor, now gets 25% of its operating profit from agrofuels.

Eric Holt-Giménez, Executive Director of Food First and the lead author of the brief, concludes that “in order to think about alternatives to agrofuels—local biofuels, conservation, wind, or solar—and in order to advance truly sustainable agricultural development at home and abroad, we need to construct an alternative food and energy context. We must challenge the political-economic context as well as the technologies, debunk the assumptions as well as the claims, and propose new relationships between producers and consumers in our food and fuel systems.”

To remove the artificial market incentive that created the industry—the RFS targets—Food First, with a coalition of progressive U.S. organizations, proposes a Moratorium on U.S. agrofuels. The call for a Moratorium can be found and signed here:http://ga3.org/campaign/agrofuelsmoratorium.

To obtain a copy of the report, contact info@foodfirst.org