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Food vs. Fuel
U.S. Biofuels and the Global Food Crisis
Since 2005, U.S. biofuel production has increased dramatically, primarily with the expansion of corn-based ethanol. Fueled by a range of government policies, U.S. ethanol now consumes 40% of the country’s corn. Because the United States is by far the largest global producer and exporter of corn, this has dramatic impacts on global markets. Fully 15% of global corn production now goes to U.S. ethanol, a “demand shock” to international food markets that has contributed to the steep price increases seen in the last few years. Estimates suggest that U.S. ethanol expansion accounts for 20-40% of international corn prices.
As part of its ongoing research on the global food crisis, GDAE has examined the costs to developing countries of U.S. ethanol expansion. In academic papers and related policy reports, GDAE’s Timothy A. Wise has documented the costs to corn-importing countries of this ethanol premium.
 Fueling the Food Crisis
Wise uses the same methodology to estimate the ethanol-related costs for all net corn-importing countries, in this October 2012, paper and report. He finds a six-year cost of $11.6 billion for all countries, $6.6 billion among developing country corn importers. Central America and North Africa show particularly high impacts.
Further Analysis:
Biofuels and Hunger: The Story from Guatemala, by Timothy A. Wise, GDAE Globalization Commentary, from Triple Crisis Blog, January 7, 2013
US corn ethanol fuels food crisis in developing countries, Timothy A. Wise, Al Jazeera English, October 10, 2012
If we want food to remain cheap we need to stop putting it in our cars, by Timothy A. Wise, Economics Blog from The Guardian, September 5, 2012
Running on Empty: U.S. ethanol policies set to reach their illogical conclusion, by Timothy A. Wise, GDAE Globalization Commentary, from Triple Crisis Blog, July 23, 2012
Spotlight G20: Will Mexico Lead Action on Biofuels, Food Crisis?, by Timothy A. Wise, GDAE Globalization Commentary, from Triple Crisis Blog, May 16, 2012
Read the related study from the New England Complex Systems Institute, “Impact of ethanol conversion and financial speculation on Mexico corn imports”
Read the policy report by Wise and Sophia Murphy, “Resolving the Food Crisis: Assessing Global Policy Reforms Since 2007”
Read more on GDAE’s work on the Global Food Crisis and U.S. Biofuels.
Media Coverage:
Ethanol scam drives up food prices and stifles economic recovery, Andrew P. Morriss, Kansas City Star, January 10, 2013
What Does Biofuel Have to Do With the Price of Tortillas in Guatemala? Tom Philpott, Mother Jones, January 9, 2013
Biofuels: Starving Guatemalans to Feed Cars, Ronald Bailey, Reason Magazine, January 7, 2013
As Biofuel Demand Grows, So Do Guatemala’s Hunger Pangs, Elizabeth Rosenthal, New York Times, January 5, 2013
U.S. Biofuel Expansion Cost Developing Countries $6.6 Billion: Tufts, Marlo Lewis, on Globalwarming.org, October 12, 2012
U.S. ethanol policy harmful to developing countries, study claims, Christopher Doering, Des Moines Register, October 11, 2012
 Fueling the Food Crisis, Tim Wise on The Real News Network (September 10, 2012)
"Corn lobby outgrows US farm subsidies" Chris Arsenault, Al Jazeera, August 31, 2012
Feeding capitalists GDAE's Timothy A. Wise appears on this videocast to discuss rising food costs and overconsumption. (August 27, 2012)
"Mexico To Urge More Non-Food Biofuel Research At G-20 Summit" by Jean Guerrero, Dow Jones Newswires, May 30, 2012
"New report signals need for US and Mexico to put biofuels on the table at G-20" on TckTckTck, May 17, 2012
“The Cost to Mexico of US Corn Ethanol Expansion” Global Start, International Business Intelligence, May 16, 2012
Read more of GDAE’s work on the Global Food Crisis
The Global Development and Environment Institute’s Globalization and Sustainable Development Program examines the economic, social and environmental impacts of economic integration in developing countries, with a particular emphasis on the WTO and NAFTA's lessons for trade and development policy. The goal of the program is to identify policies and international agreements that foster sustainable development. |
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