News is just out that North Korea has been hit by floods with hundreds dead and widespread damage. Tens of thousands of hectares of farmland have been destroyed. This means a bad harvest this year for a country that already needs to import grain during good years. North Korea usually does not readily admit having problems, so the fact that they ask for help probably means the situation is really bad. Read more about it in IHT.
The floods that have hit two-thirds of Bangladesh for the last three weeks are now receding, but have destroyed nearly 133,000 tonnes of rice that was about to be harvested. Read more about it in Daily India. These floods have also hit nearby Bihar in India, damaging crops on more than 1 million hectares and destroying food grain stocks. Read more about it in Daily India.
On the bright side, it can be noted that Afghanistan has doubled its production of cereals in the six years since the Taliban regime fell, according to an article from FAO.
However, global stockpiles of wheat are at 30-year lows, and the price of wheat has climbed 34 percent this year. Maize (corn) and wheat are being used as feedstocks for ethanol plants both in Europe and USA, which has driven up the price of these grains. Other food crops have also increased in price, either because they are used to produce biodiesel, e.g. canola/rapeseed, or because higher prices for corn and wheat have made farmers sow more of these and less of other crops. The prices of meat and dairy products have also risen, because the animals are fed on grain. All this will of course lead to higher food prices, which will have a number of effects.
- Emergency food relief programs for places like Bangladesh, Bihar and North Korea will cost more, leading to tight budgets for aid organisations.
- Higher food prices mean higher inflation. "Core" inflation in the USA excludes both food and energy, but this inflation measure is a scam - who can survive without food and energy? Look at the real price inflation figures instead.
- Higher food prices lead to consumers having less money left to buy other stuff. Good for mother nature, because less consumption means less resources used up. Bad for our consumer-driven economy.
The current trends of more grain converted into ethanol and harvest problems in many places in the world are likely to continue, sending food prices still higher. Add an ever-increasing world population and things are starting to look pretty grim.
Now one of the easiest things the world could do to improve the current food situation would be to stop the whole grain to ethanol business. I doubt whether the grain to ethanol industry would actually survive if it were not for government subsidies.
Additionally, it is doubtful that converting grain to ethanol actually produces any net energy gain to speak of. To produce the ethanol you need a lot of energy. Diesel to run the tractors, natural gas to produce fertilisers, more diesel for transports, etc. An important concept for all fuels is EROEI (Energy Return On Energy Invested), i.e. how much energy you need to put in to get your fuel. For crude oil EROEI is very high, about 10 to 1 for good fields. This means that you need to use the energy equivalent of one barrel of oil for every ten barrels produced. This energy is used for drilling, transports, etc. There are a number of studies of the EROEI of grain to ethanol, and they all show an EROEI close to 1. This means that you actually have to input nearly as much energy as you get out of the whole process. Some studies show an EROEI of 1.2, which means that the ethanol only contains 20% more energy than all the inputs. Is it really worth all the adverse side effects of rising food prices to get that measly extra energy? Other studies (e.g. by Patzek and Pimentel) even show that grain to ethanol has an EROEI below 1, which means you actually loose energy in the process!
In any case, even if it turns out grain ethanol has an EROEI greater than 1, we would need so much farmland to grow enough grain to feed all our cars that there simply isn't that much farmland!
So, please, could all governments stop their subsidies to the grain to ethanol business now.