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.
Nowhere, perhaps, is that squeeze more obvious than in Guatemala, which is “getting hit from both sides of the Atlantic,” in its fields and at its markets, said Timothy Wise, a Tufts University development expert who is studying the problem globally with Actionaid, a policy group based in Washington that focuses on poverty.
With its corn-based diet and proximity to the United States, Central America has long been vulnerable to economic riptides related to the United States’ corn policy. Now that the United States is using 40 percent of its crop to make biofuel, it is not surprising that tortilla prices have doubled in Guatemala, which imports nearly half of its corn.
That’s from an article earlier this week in the New York Times.
The article also goes on to cite my Iowa State colleague Bruce Babcock, about how 2011 corn prices would have been almost 20 percent lower this year had it not been for the US renewable fuel standard.
This leaves me wondering: Though I realize the cultural importance of certain foods, why aren’t people substituting away from corn-based foods like tortillas toward other foods, or is the price of food in general increasing in Guatemala?
And if the price of food in general is increasing in Guatemala, why is the international trade of food not used as a stopgap? I wish someone familiar with Guatemala would provide some answers in the comments.
The Times piece is nicely done, as it combines a written story with several interviews with Guatemalan farmers.
Closer to me, Peter Maniloff, a PhD candidate at the Nicholas School of the Environment, is currently working on the relationship between ethanol and energy security, among other things. He and I have recently begun working on the relationship between biofuels and food prices. For those of you who are on hiring committees, Peter is on the job market this year.
HT: Janet.