April 25th, 2008 by Hafiz Noor Shams
Roger Cohen at the NYT insists that biofuel is not the cause of food crisis, or at least not a major one if one wants to be accurate about magnitude, since it is still a small industry. Instead, he is convinced that what is causing it is protectionism.
Much larger trends are at work. They dwarf the still tiny biofuel industry (roughly a $40 billion annual business, or the equivalent of Exxon Mobil’s $40.6 billion profits in 2007). I refer to the rise of more than one-third of humanity in China and India, the disintegrating dollar and soaring oil prices.
What sense does it make to have a surplus of environmentally friendly Brazilian sugar-based ethanol with a yield eight times higher than U.S. corn ethanol and zero impact on food prices being kept from an American market by a tariff of 54 cents on a gallon while Iowan corn ethanol gets a subsidy?
The real scam lies in developed world protectionism and skewed subsidies, not the biofuel idea. [Bring on the Right Biofuels. Roger Cohen. NYT. April 25 2008]
Honestly, it is hard for me to say without looking at the data but I am leaning to his conclusion. Maybe, this warrants a short essay by itself.
Anyway, another go at the Doha Round, anybody?