12/05/2008 (The Post, Pakistan) - Massive production of bio-fuels is ‘a crime against humanity’ because of its impact on global food prices that are increasing day by day and has been out of reach of a poor man, a UN report indicated. In 2006, worldwide bio-fuel production reached 44 billion litres, which include 38 billion litres of ethanol.

It was demanded that the International Monetary Fund (IMF) should change its policies on agricultural subsidies and stop supporting those programmes aimed at debt reduction and using arable land to produce crops for bio-fuels. Agriculture should be subsidised in regions where it is grown for the survival of local population. If this trend would continue, land available to grow food would be reduced with the passage of time, the report observed.

Experts say food crisis may cause violence and political instability. They warned that the world is heading “towards a very long period of riots” and other types of conflicts stemming from food shortages and price increases.

For instance in recent months, rising food prices have sparked violent protests in Cameroon, Egypt, Ethiopia, Haiti, Indonesia, Ivory Coast, Madagascar, Mauritania, the Philippines and in many other countries.

In Pakistan and Thailand troops have been deployed to avoid the seizure of food from fields and warehouses, while price increases fueled a general strike in Burkina Faso. The head of the German consumer protection group also cautioned against “the lethal trade policies of industrialised countries.” Experts said that there is a need of a different energy policy because it is not right that we fill our tanks at the expense of those who are starving.

The supporters said bio-fuels are an emerging solution of present day’s oil concerns whose prices have increased $ 120 per barrel. The continuous depletion of fossil fuel resources and environmental concerns has compelled various nations to switch over to alternate or renewable sources. Pakistan is also entering into this field. Ethanol is a potential bio-fuel, which can be produced from molasses, a waste by-product of sugar industry. Pakistan has large quantities of molasses, which become a renewable biomass for ethanol. So far Pakistan has not joined the race for bio-fuels; presently it is being exported at through away prices.

Bio-fuel supporters are facing severe criticism that the ‘green’, alternative transport fuel has raised food prices. The supporters said the record oil prices are harming industry and degrading environment and bio-fuel is the best substitute of gasoline and diesel. The German bio-diesel industry is lobbying against tax increases time table from next January.

They argued that bio-fuels are meant to be a perfect answer of problems, including climate change, energy dependency and dwindling farm incomes. Produced from food crops like sugarcane, rapeseed and palm oil, they provide an alternative to conventional transport fuels like gasoline and diesel. The bio-fuel has become more important because oil supplies are controlled by a few producing countries who made a cartel.

However, by using such crops to produce bio-fuels surely compete with food production, resulting higher food prices. It is projected that food prices would hike to 20 to 50 percent by 2016. It was also predicted that US food prices would jump by five percent this year. At the same time, about a quarter of the US corn crop will go toward ethanol. President Bush said, “In the national interest our farmers have to grow more energy so that the country’s dependence on imported energy, from different parts of the world, may be reduced.” He said these sources are unstable or may not like us to supply oil. With more costly food and fuel, the economy is slowing down and ranks of needy Americans receiving government food vouchers on the rise, a reaction of this situation is emerging in the US economy.

In spite of US President’s announcement that he would turn the US into a bio-fuel growing nation the crop-based fuels in the US cannot replace oil and that it will have to continue to buy oil from the same countries for long. Even if the country’s entire corn and Soya harvests are used to produce them, they would, at the most would satisfied only 12 percent of the current demand of the country for petrol and six percent of its need for diesel. Aggressive support, including tax credits and import tariffs has created a boom in bio-fuel using which is water to grow a tonne of corn and then using more water to turn the corn into ethanol.

Recently in December 2007, the Chinese government came up with controls on come-to-ethanol projects so as not to lose more precious water-producing fuel, at the expense of food. The trade-off between water and bio-fuels may also be crucial for India. One-sixth of India’s food output is being supported by pumping groundwater, which is depleting rapidly. According to the World Bank’s estimates by 2050 demand for water in India will exceed to all available commodities.

The world is wondering how China and India, the fast growing economies, would tackle the problem of increasing fuel demand on such higher prices. It is clear that fossil fuels would not be enough to meet the growing demand for energy. Therefore, to find alternative fuel sources is being searched in everything from corn to sugarcane to oil palm.

The tripling of crude oil prices in five years, policy-makers in Beijing and New Delhi, too, has begun routing for bio-fuels. Ethanol plants in Minnesota use from 3.5 gallon to six gallon of water to produce one gallon of ethanol from corn, says the Minneapolis-based Institute for Agriculture and Trade Policy. While there will be a 254 percent increase in the volume of water used in the US for ethanol production from 1998 to 2008.

Bio-diesel is a clean burning alternative fuel, produced from renewable resources. It can be blended with petroleum diesel to create a bio-diesel blend or could be used directly. It can be used in compression-ignition, diesel, and engines with little or no modifications. It is simple to use, biodegradable, nontoxic, and essentially free of sulfur and aromatics.

Bio-fuel production in developing countries, including Brazil and Indonesia could soon earn carbon credits using lucrative north-south incentives, the new head of carbon trading at the United Nations’ (UN’s) climate body. Bio-fuel production is already booming in countries like Brazil, the world largest producer of ethanol from sugar and Malaysia and Indonesia, the biggest producers of bio-diesel from palm oil. Within less than two years, a multi-billion dollar bio-fuel industry has developed in Malaysia and Indonesia, using the world’s highest yielding feed stocks, i.e., palm oil. Their governments, supported by international investment, have drawn up a blueprint for converting large areas of their countries into mega plantations to grow fuel for richer nations’ cars.

Producers would soon have more good news as the UN to allow bio-fuels to qualify for its $3 billion carbon trading scheme, called the Clean Development Mechanism (CDM). The alternative transport fuel generates fewer carbon emissions than fossil fuels when burned because the plants they are derived absorb same gases.

Agriculture researchers said a moratorium on grain based bio-fuels would help ease ranging wheat and corn prices by 20 percent in the next few years. But if a moratorium on bio-fuel is issued in 2008, there will be a price decline of maize by about 20 percent and for wheat by 10 percent in 2009-10. Therefore, there is an urgent need to revise the policy of using bio-fuel, being produced from crops, so that people should be saved from starvation.

An economic analysis shows that bio-fuels are not viable because most of the production heavily rely on environment, subsidies and productivity. Therefore, the supply cannot be predicted and the most unreliable source of raw material for bio-fuel industry.