Early 2007, ethanol production all at once got bad press as some studies , alerted that increasing production of ethanol might reduce food production, and hence raise the price of food staples and creating all kinds of side effects including increased famine in the poorer countries .
Indeed, in the US, corn production for ethanol could create and imbalance between the 'four F': food, feed, fiber and fuel.
The quantity of corn used for fuel production has tripled between 2001 and 2006 – reaching 55 million tonnes, or about 1/6th of the country’s corn production; but producing only 3% of the fuel needed for all US cars. It is said that the quantity of corn needed to produce 1 tankload of fuel for a van, would be sufficient to feed one person for one year.
For instance in Iowa, where 55 ethanol plants are being planned, Bob Wisner from the Iowa State University has calculated that those will use up all corn production of the state.
Not unsuspiciously, Hugo Chavez voiced this problem loudly at the Latin America Energy Summit held in Venezuela, and even Fidel Castro sent a message from his sick bed to qualify investments in ethanol production as an 'internationalisation of genocide'.
Brazil, being one of the largest ethanol producers worldwide, obviously gained a lot of attention.
Reality, however, shows that the increasing surface cultivated with sugar cane has not slowed down the Brazilian food production. In fact, its latest cereal harvest, no less than 125 million tonnes, represented an all-time record.
Reason behind this, is that Brazil has excellent conditions to increase sugar cane areals without prejudice to other crops. A strategic workgroup has identified 12 new frontiers suitable for sugar cane plantation, without any legal or environmental issues.
Those are located in Sao Paulo, Minas Gerais, Mato Grosso and Goias; and total about 80 million hectares – about the size of Germany and Spain summed up.
The tortilla march
The origin of all this press actually lies in Mexico, where tens of thousands of citizens went on the streets to protest against the steep price increase of corn – over 400% - which is mostly imported from the United States.
In the US, ethanol is produced from corn – and as the output got suddenly directed to ethanol rather than tortilla flour the quantities available for exports dropped dramatically.
Over the last year, the price of corn on the Chicago and New York markets increased by 50%.
In Brazil, the percentage of sugar cane production used for ethanol is expected to decline as well – from 53% in 2005 to 41% in 2010 and33% in 2014 . However, this will come largely from increase of total production rather than cannibalisation.
The impact on forests
In Asia, especially in Malaysia and Indonesia, large portions of native jungle are being destroyed to make place for dende palm plantations (which makes for an excellent source of bio-diesel).
In Brazil, ecologists are more concerned about the conversion of cattle farms to sugar cane farms – pushing the cattle farms to move to previously uncultivated areas. This is, for example reported in Mato Grosso
In the US, currently only 14% of corn production is converted to ethanol, but by 2014, the proportion is expected to rise to 36%.
This causes more of a problem in the US than it would cause in Brazil: because hardly any land is available for expansion, corn production for ethanol does cannibalise food production – raising not only the price of corn but also those influence by it, like poultry.
Texas – of all states - has overnight transformed from a cattle farming state to an ethanol producer, with two of the country's largest ethanol plants expected to come on line this year in Texas.
In total, 16 billion dollar worth of investments are being planned for 80 new plants in the next few years.
However, the US technology, based on corn, is not only one third more expensive – it also produces only half the ethanol output per hectare that the Brazilian plants produce. Finally, its production process consumes about 4 times more energy than the Brazilian technology.
An import barrier – 54 dollar cents per gallon – keeps the US farmers safe for the moment, but it is not unlikely that these barriers will soon be lifted. In fact, this barrier was only created in 2002, the year in which Bush approved a $190 billion support package to the corn lobby, thanks to the efforts of Senator Grassley,