Rob Katz

Biofuels and the BOP

BiofuelsChris Monasterski over at the PSDBlog connects biofuels, world hunger, and The Next 4 Billion report. Wish I had thought of it! (Seriously, bravo Chris.) Check it out – biofuels are driving food costs up, which puts pressure on BOP budgets. The poor are among those most at risk from the effects of massive climate change, but if we in the West/North have to divert food stocks away from BOP populations in order to avoid climate change, are the effects on BOP communities any better (or even worse?) To be seen. In the meantime, here’s what Chris has to say:

From Foreign Affairs:

The enormous volume of corn required by the ethanol industry is sending shock waves through the food system. [?] corn futures rose to over $4.38 a bushel, the highest in ten years.

Biofuels have tied oil and food prices together in ways that could [have] potentially devastating implications for both global poverty and food security.

[?] resorting to biofuels is likely to exacerbate world hunger. Several studies [?] suggest that caloric consumption among the world’s poor declines by about half of one percent whenever the average prices of all major food staples increase by one percent.

When one staple becomes more expensive, people try to replace it with a cheaper one, but if the prices of nearly all staples go up, they are left with no alternative.

Food expenditures already consume over 50 percent of budgets in households at the bottom of the pyramid. In Nigeria, food accounts for 52 percent and in rural Pakistan 55 percent of BOP spending. A final statistic from the article:

Filling the 25-gallon tank of an SUV with pure ethanol requires over 450 pounds of corn–which contains enough calories to feed one person for a year.