2.4 Socio-Economic Issues and North-South Dimensions
35
markets, biofuels could worsen food insecurity by making food less affordable to the
poor (Runge and Senauer 2007).
Global food prices indeed rose sharply over the past decades, most notably
after 2005 up to a peak in 2008 (The Economist 2007; OECD/FAO 2013). As this
happened alongside an increase in biofuel demand, the “food vs. fuel” debate gained
momentum. The contention was perhaps best captured by the declaration of Jean
Ziegler, then UN Special Rapporteur on the Right to Food, calling biofuels “a crime
against humanity” (Ferrett 2007). In 2008, a leaked World Bank report suggested
that biofuels were responsible for as much as 75% of all the increase in global
food prices (see Mitchell 2008). Later many analysts attempted to assess the role of
biofuels in affecting food prices, and most of their findings suggest that, although
biofuel demand plays an important role, it has taken a disproportionate share of the
blame (Baffes and Haniotis 2010; Banse et al. 2008; FAO 2008; Ajanovic 2011;
Persson 2015; Tomei and Helliwell 2016).
It has become clear that many other factors were significant, such as shortterm weather-related shortfalls in production and the sharp rise in international oil
prices during the 2008 food-price crisis (Baffes and Haniotis 2010; Shrestha et al.
2019). Moreover, financial speculation on agricultural commodities can substantially
contribute to food price volatility (Clapp 2009). As some have put it, the “food vs.
fuel” frame may provide an “emotive and powerful message” to critique biofuels on
ethical grounds and in an appealing way. However, it masks the multitude of uses that
agricultural commodities have had. Their prices have long experienced interlinkages
with other variables such as land availability and chemical-input costs (Tomei and
Helliwell 2016).
After the significant volatility seen between 2007 and 2014, agricultural
commodity prices stabilized (OECD/FAO 2019). The trumpets may have been too
quick to declare “the end of cheap food,” given that production continues to significantly expand—even if, problematically, often at the cost of natural ecosystems of
high conservation value. Food prices were, in fact, on a gradual downward trend by
the time the COVID-19 pandemic brought the global economy to a standstill in 2020
and again shook agricultural commodity markets (UNCTAD 2020).
The discussion on prices and food insecurity may, however, need more nuance. For
instance, it must be asked why some developing countries have become so dependent
on food imports and vulnerable to international food price volatility (Clapp 2009).
Besides, higher agricultural commodity prices are a double-edged sword; it is legitimately a concern, but it may benefit countries and sectors of the economy involved
in agriculture. More directly, higher prices could potentially help rural populations,
which make up three-quarters of the world’s poor (World Bank 2008). If done in
socially inclusive ways, biofuel production and other forms of bioeconomy promotion may help tackle rural poverty by creating income for smallholders, increasing
their purchasing power, and improving local food security (Von Braun and Pachauri
2006; Börner et al. 2017; Bastos Lima 2018). If the bioeconomy indeed is inevitable
in a world without fossil fuels (and without a climate breakdown), these questions
on reconciling it with food security promotion are paramount.
35
markets, biofuels could worsen food insecurity by making food less affordable to the
poor (Runge and Senauer 2007).
Global food prices indeed rose sharply over the past decades, most notably
after 2005 up to a peak in 2008 (The Economist 2007; OECD/FAO 2013). As this
happened alongside an increase in biofuel demand, the “food vs. fuel” debate gained
momentum. The contention was perhaps best captured by the declaration of Jean
Ziegler, then UN Special Rapporteur on the Right to Food, calling biofuels “a crime
against humanity” (Ferrett 2007). In 2008, a leaked World Bank report suggested
that biofuels were responsible for as much as 75% of all the increase in global
food prices (see Mitchell 2008). Later many analysts attempted to assess the role of
biofuels in affecting food prices, and most of their findings suggest that, although
biofuel demand plays an important role, it has taken a disproportionate share of the
blame (Baffes and Haniotis 2010; Banse et al. 2008; FAO 2008; Ajanovic 2011;
Persson 2015; Tomei and Helliwell 2016).
It has become clear that many other factors were significant, such as shortterm weather-related shortfalls in production and the sharp rise in international oil
prices during the 2008 food-price crisis (Baffes and Haniotis 2010; Shrestha et al.
2019). Moreover, financial speculation on agricultural commodities can substantially
contribute to food price volatility (Clapp 2009). As some have put it, the “food vs.
fuel” frame may provide an “emotive and powerful message” to critique biofuels on
ethical grounds and in an appealing way. However, it masks the multitude of uses that
agricultural commodities have had. Their prices have long experienced interlinkages
with other variables such as land availability and chemical-input costs (Tomei and
Helliwell 2016).
After the significant volatility seen between 2007 and 2014, agricultural
commodity prices stabilized (OECD/FAO 2019). The trumpets may have been too
quick to declare “the end of cheap food,” given that production continues to significantly expand—even if, problematically, often at the cost of natural ecosystems of
high conservation value. Food prices were, in fact, on a gradual downward trend by
the time the COVID-19 pandemic brought the global economy to a standstill in 2020
and again shook agricultural commodity markets (UNCTAD 2020).
The discussion on prices and food insecurity may, however, need more nuance. For
instance, it must be asked why some developing countries have become so dependent
on food imports and vulnerable to international food price volatility (Clapp 2009).
Besides, higher agricultural commodity prices are a double-edged sword; it is legitimately a concern, but it may benefit countries and sectors of the economy involved
in agriculture. More directly, higher prices could potentially help rural populations,
which make up three-quarters of the world’s poor (World Bank 2008). If done in
socially inclusive ways, biofuel production and other forms of bioeconomy promotion may help tackle rural poverty by creating income for smallholders, increasing
their purchasing power, and improving local food security (Von Braun and Pachauri
2006; Börner et al. 2017; Bastos Lima 2018). If the bioeconomy indeed is inevitable
in a world without fossil fuels (and without a climate breakdown), these questions
on reconciling it with food security promotion are paramount.