by Joseph Robertson

Created on: July 26, 2008

STEEP RISE IN FOOD PRICES LINKED TO DIVERSION OF GRAINS TO BIOFUEL PRODUCTION

In a period of roughly 18 months, the price of corn across central American markets has doubled, making staple foodstuffs too expensive for many in the region. Today, what is described as an "angry mob" of protesters suffering food scarcity attacked the government palace in Port-au-Prince; UN peacekeepers responded by firing teargas, while food markets remained closed throughout.

In El Salvador, demonstrators marched in the streets banging pots and pans and demanding action to prevent the further inflation of food costs and to reverse the already extreme and damaging increases in the cost of living. Commodities across the board, from industrial raw materials to basic foodstuffs, have been increasing at unprecedented rates across world markets, straining both wealthy and poorer economies.

Fuel costs, tied to the steadily rising price of oil, hovering near record highs, have been widely blamed, but there are after-effects of those fuel costs that may be more central to the food supply and pricing problem. Corn-based ethanol, a booming new industry in the US midwest, is taking over increasing portions of the corn export crop in Iowa, the world's most productive corn-growing terrain.

As those looking to make a profit from selling grains to feed combustion engines steadily eat into the world's food supply, food prices are stressed again, far above the stresses created by the high price of already existing fuels. There has been a decidedly inadequate amount of serious planning for the aftermath of a diversion of grain crops to fuel production, leaving those in need in a desperate spiral of rising prices and food scarcity.

Food security is not a new problem; it has been relevant to the legitimacy of political and economic systems throughout all of history. But now we face a new challenge to the stability of integrated global food markets. As theEarth Policy Institute reports

Corn prices have doubled over the last year, wheat futures are trading at their highest level in 10 years, and rice prices are rising too. In addition, soybean futures have risen by half. A Bloomberg analysis notes that the soaring use of corn as the feedstock for fuel ethanol "is creating unintended consequences throughout the global food chain."

There is mounting concern that food security is now tied to political stability at not only national but even regional levels, with potential negative repercussions for the entire

• 1
• 2
• Next Page >>