"Brazil, the world's biggest ethanol exporter, is bristling over criticism of its biofuel," reports The Christian Science Monitor. "As wheat, rice, and corn prices rise sharply, critics say producing fuel for cars is taking precedence over food for people. President Luiz Inacio Lula da Silva says the bad publicity is unwarranted and uninformed. Many biofuel experts agree. Critics, they say, fail to distinguish between the different kinds of ethanol. Brazilian ethanol from sugar cane is up to eight times more energy efficient to produce than ethanol derived from corn, beets, wheat, or other temperate crops."
In the Free Trade Bulletin "Food Fight," Sallie James, trade policy analyst, writes:
"Facts on the demand side suggest that the recent price increases are more structural compared to the cyclical, supply-driven booms of the past. Government policies in developed countries that seek to support farmers by creating artificial demand for ethanol are an important culprit. In addition, economic growth in countries such as China, Brazil, and India has created a large and growing middle class that is acquiring western-style eating habits. The Chinese, for example, have almost doubled their consumption of meat from about 44 lbs. per capita in 1980 to 110 lbs. per capita today. That in turn has pushed up demand for feed grains, because one lb. of beef requires about 13 lbs. of grain to produce. Although high prices will encourage entrepreneurs to increase production, and infrastructure investment will help increase yields and correct the current market imbalance, government actions are impeding the efficient allocation of resources that would normally see lower prices."
Laura Osio, editor, losio@cato.org
No comments:
Post a Comment