G20 and Biofuels

Thursday, July 12, 2012 - 17:25

By Clare Coffey, ActionAid UK.

Most experts are now agreed that the expansion of land devoted to raising crops used in biofuel production has been a significant factor in high and volatile food prices over the last six years. The equation is clear: the land and other resources once used to grow crops for food is now being diverted to growing crops for biofuel production. Indeed in many cases the crops are the same – but demand for biofuels, spurred by regulations in Europe and North America, means the crops can be sold more profitably for fuel than for food. 

A landmark report produced at the request of the G20 agriculture ministers in June 2011 pointed this out. It did not come from civil society, but from ten international organisations including the World Bank, International Monetary Fund and the UN Food and Agriculture Organisation. Its recommendation was unambiguous: end subsidies and mandates for biofuels.  The Mexican government, as chair of the G20, had identified food security and food price volatility among the key issues to address at the June Los Cabos summit. Since the food price rises of 2008, food security has become a bit of a G20 fixture, although progress towards tackling the underlying causes of food insecurity has been limited.

Given biofuels’ role in food prices, and the fact that G20 countries also drive global biofuel production, ActionAid has been calling on the G20 to talk about biofuels, and to call for targets to be eliminated. Ahead of the Los Cabos summit, a report by ActionAid USA - Biofueling Hunger: How US Corn Ethanol Policy Drives Up Food Prices in Mexico – demonstrated the impact that US biofuels policies are already having on Mexican tortilla prices, which account for a big share of Mexican food expenditure.

A second ActionAid report – Biofuelling the Global Food Crisis – points to the fact that biofuels’ impacts on food prices will not be going away. Just meeting EU targets to 2020 will push up the price of key food crops significantly. Based on official research, ActionAid suggests that EU biofuel targets alone could push prices of certain food crops up by as much as 36% by 2020.

In the end, biofuels did not make it into the formal discussions, not least because countries were more preoccupied with the Eurozone crisis than tackling the causes of poverty that means nearly 1 billion people are hungry.

Despite the important role played by biofuels production in contributing to food price swings, in the end the word ‘biofuels’ doesn’t appear once in the final G20 communiqué. Despite the fact that the corporate leaders gathered in Los Cabos as the “Business 20” publicly echoed the international organizations’ call for an end to biofuel mandates, the G20 ignored the growing consensus  urging them to stop converting food for fuel.