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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.

Cover of Biofueling HungerBiofueling Hunger: How U.S. Corn Ethanol Policy Drives Up Food Prices in Mexico

In this May 2012 paper and report, Wise estimates that from 2006-11 Mexico paid an extra $1.5 billion for corn imports from the United States due to ethanol-related price increases that reached 21% in recent years. This contributed to a 69% increase in prices for tortillas, Mexico’s most important staple food.
( Also available in Spanish.)


Cover of Fueling the Food CrisisFueling 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:

Fiddling in Rome while our food burns, Timothy A. Wise and Marie Brill, Al Jazeera, October 17, 2013

Committee on World Food Security: Biofuels Intervention, Timothy A. WIse, presentation of Civil Society Mechanism intervention, October 8, 2013 (See related open letter to the Committee on World Food Security)

Changing Course to Feed the World in 2050, Timothy A. Wise and Marie Brill, GDAE Globalization Commentary, from Triple Crisis Blog, October 3, 2013

Biofuels and Hunger: The Story from Guatemala, by Timothy A. Wise, GDAE Globalization Commentary, from Triple Crisis Blog, January 7, 2013

Biofuels and the Right to Food: Time for the US to get its head out of the sand, Timothy A. Wise, GDAE Globalization Commentary, from Triple Crisis Blog, November 27, 2012

Other reasons behind high food prices, Timothy A. Wise, Letter to Financial Times November 22, 2012

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:

National Geographic video on When Food Is FuelWhen Food Is Fuel
Biofuel production is booming, up fivefold in a decade. Investment in biofuel technologies creates more renewable fuels and jobs, but producing fuels like corn-based ethanol diverts land and water resources from food crops. Biofuels can also drive up the cost of corn that is used for food, especially in developing countries that rely on imports of the grain. GDAE's Timothy A. Wise contributed research to this National Geographic video. (September 15, 2014)

Soberanía alimentaria vs desarrollo económico de México, Juan Danell, Imagen Agropecuaria, April 6, 2013
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

Wise on "Fueling the Food Crisis"Fueling the Food Crisis, Tim Wise on The Real News Network (September 10, 2012)


Wise TRNN Interview on Biofuels The Drought and the Coming Food Price Bubble- Timothy A. Wise was interviewed by The Real News Network to discuss how biofuels, climate change, and speculation exacerbate the food crisis. ( August 13, 2012)



"Corn lobby outgrows US farm subsidies" Chris Arsenault, Al Jazeera, August 31, 2012

Wise on Cross Talk
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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