The other global crisis: rush to biofuels drives up food prices

Millions – millions! – forced into starvation by high food prices. The World Bank President warns the G7 that the world is on the brink of catastrophe. The rush to biofuels, unpredictable weather and increasing global consumption are forcing food shortages.

How are we to respond? Is it too obvious to simply end subsidies for biofuel immediately?

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Comments & Responses

2 Responses so far.

  1. grahaminn says:

    Subsidising biofuels is a bad idea for it’s own reasons, and the use of farmland for biofuel rather than food production is an underlying fundamental acting upwards on the price of food commodities.

    However, the real reason for the recent and dramatic surge in food commodity prices is the dramatic flight of investor capital away from equities and debt towards the safe havens of imperishable precious metals and ‘stuff people actually need’.

    These prices have gotten so high, so quickly because of where the money is stampeding running from (last phase of the Austrian business cycle), rather than because of the steady, but not doubt important, fundamentals of year on year x% monetary inflation, y% population growth and z% encroachment on food production for fuel production.

    I don’t have the link at the mo, but there was a very interesting interview of Jim Rogers (co-founder of the Quantum Fund with George Soros) on slating the govt. bailout of the banking sector and advising people to get into agricultural commodities about a month ago.