The prices of key agricultural commodities including as corn, wheat and vegetable oils will escalate sharply in response to EU biofuel policies, hitting food manufacturers and those who rely on crops as a sole food source the hardest.
The new report from development charity ActionAid, warns that Europe’s demand for biofuels could drive up food crop prices by as much as 36% by 2020 – helping to push millions more into hunger, and also creating increased volatility and price pressures in the food manufacturing industry.
“The G20 must acknowledge the significant role of biofuels in worsening global food security. A billion people around the world are already malnourished. EU and other countries are sleep-walking their way to a global food security disaster,” said Clare Coffey, policy advisor at ActionAid.
Speaking with FoodNavigator, Coffey said, the results of the charity’s study “point towards an increase in specific agricultural commodities that will hit the poorest people.”
“But of course anybody using these commodities as an input for production will equally feel the brunt of that.
“The European food industry in general should support the lobbying for the removal of these biofuel targets,” she argued.
European biofuels use is expected to reach the equivalent of nearly 30 million tonnes of oil by the end of this decade, driven by a mandatory target for 10% of renewable energy in transport fuels by 2020.
If this happens, the impact on food price rises will have huge implications for the world’s poorest people. By committing biofuels targets to history, leaders at next week’s G20 summit could take a giant leap towards protecting global food security and ensuring long term price stability.
“Biofuels will be the elephant in the room at the G20 summit as no-one there is prepared to speak out on the subject,” said Coffey. “Yet by getting rid of biofuel mandates … world leaders could at the stroke of a pen, tackle a key factor behind world food price rises and volatility.”
“Food prices are just one part of this, because in the long term the increase of biofuel production will also lead to less land and water being available for food production,” explained Coffey – who noted that the global energy sector is 20 times larger than the food sector.
“Even small increases fuel production from these sources will result in large scale volatility and price increases in the food sector,” she warned. “If we stay on track with biofuel targets – where does that leave land and water for food?”
Coffey told us that ‘powerful’ lobbying from farmers and the energy sector – who see the targets as a ‘lucrative’ opportunity – has persuaded world leaders to ignore the scientific facts and refuse to address the issues biofuels are having on foods prices.
She suggested that industry and other groups can help by providing an equal or stronger lobby to help policy makers realise the implications of biofuel production on food price volatility.
“People have a right to food; it’s something we can’t live without … The industry needs to put itself behind that message.”
The policy advisor said European and international food manufacturers should now look at ways to contribute to lobbying on the topic – “because the large scale diversion of food crops for energy production is a disaster waiting to happen”