There has been a lot of dicussion in the media recently about biofuels.  Many people, even U.N. officials, claim that producing biofuels is pushing up the cost of producing food and thus making it more difficult to fund projects in third-world countries.

The issue is so important, that my car dealer has sent out a newsletter to inform his bio-ethanol customers how he sees the situation.

He agrees that the price of basic foodstuffs has risen, but points out that the price of grain on the world markets is at the same level as it was in 1980.

The reason for this is apparently that during the 1990s the EU and the USA there was an overproduction of grain which, coupled with subsidies, led to the price dropping so much that it often cost more to transport a sack of grain that the contents of the sack itself were worth.

I remember at the end of the 1990s being involved in projects campaigning for the “fair pricing” of goods from third-world countries.  Farmers in those countries should have a fair chance to sell their produce on the world markets, but were being forced to sell at artificially low prices due to the subsidies of the wealthier countries.

The rising food prices are down to these policies, and not due to biofuel production, he claims.  Indeed, he continues by writing that less than 1% of the world biomass production goes towards making biofuels.  It is unlikely that such a small percentage could have such a large effect on food prices.

It is also worth noting, that European biofuels are made from sources such as sugar-beet – and mainly from extra-production or as a secondary product.

So I shall carry on filling up my car with bio-ethanol with a clear conscience.