DO YOU support Bill C33? This is the Canadian legislation requiring biofuel as a percentage of all fuel sold in Canada.
The legislation, now before the Senate, allows the government to require up to five percent renewables in all gasoline sold here or up to two percent of all diesel fuel.
I was asked this question recently and my answer is yes, but! Here’s why.
Some people claim that converting corn to ethanol is driving up the price of food. Others say it is taking food away from the poor.
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Let’s deal with the price of food first.
Commodities are enjoying record high prices due to droughts, crop failures, increased demand from China and India and financial speculation.
Some of the increase in the price of corn comes from the diversion of 30 percent of the U.S. corn crop to ethanol production. The elevated price of corn does affect the price of some other crops and in Canada there is some conversion of wheat as well.
However, the long term price of wheat and other grains continues to go down, not up. If you factor inflation out of the price, wheat sold for $800 per tonne in 1918 but that was during wartime. At the end of the Second World War, it peaked again at almost $600 per tonne. The long term trend is around $200 per tonne except for occasional spikes, like now.
When people criticize our government for an ethanol policy that will increase the price of farm commodities, I say hurray because the current prices won’t last and anything that prevents farm bankruptcy is a good thing.
Now what about the other argument, that biofuel takes food away from the poor? This is a more powerful argument but it is confusing if we only look at it from a North American perspective.
We think of both agriculture and oil in terms of exports not imports. In Europe, most oil is imported. Europeans want 10 percent of all transport fuels to be agriculturally based by 2020.
According to the United Nations Right to Food program, Europeans would have to dedicate 70 percent of all their arable land to this purpose to meet this target.
Clearly they expect to meet their targets by importing farm-based biofuel from Latin America, Africa and Asia. Not only can they preserve their own farmland, but it is cheaper too. Ethanol that costs $1 to produce in Europe costs 30 cents in Brazil.
So, it is in the southern hemisphere where food will be taken away from the poor. Already edible corn is being replaced by industrial corn.
Last year the cost of corn tortillas in Mexico increased by 400 percent, causing riots by people for whom this is their staple food.
My guess is everyone would agree that the real payoff with this new technology is not the conversion of seeds (food) into biofuel. It is the conversion of waste (used oils like french fry oil) into biodiesel and wheat straw and wood chips into what is known as cellulosic ethanol.
My “yes” has to do with my support of a market for biofuel, making the investment in new technology commercially viable and increasing the income of farmers.
My “but” means I refuse to be indifferent to the hunger of peasant farmers in the global south. Our goal has to be the conservation of fuel, conversion of waste and the guarantee of the right to food.
Christopher Lind has published widely in the area of ethics and economics. He is a Senior Fellow at Massey College, University of Toronto.
