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Mon Jan 7, 2013, 07:35 AM

Biofuels and Hunger: The story from Guatemala

Biofuels and Hunger: The story from Guatemala
Posted By Timothy A. Wise On January 7, 2013 @ 4:27 am
Timothy Wise [1]

It’s bad enough when bad policy causes unneeded suffering for those governed by that policy. It’s worse when the victims include those far from the policymaking. Such is the history of U.S. farm policy. Today, that history is being written in places like Guatemala, where the U.S. ethanol boom is contributing to hunger and landlessness among that country’s indigenous majority.

Thanks to the New York Times’ Elisabeth Rosenthal, we can see that history unfold in all its ugliness. She traveled to Guatemala for her feature, As Biofuel Demand Grows, So Do Guatemala’s Hunger Pangs [2]. Her expose makes my own, which showed how U.S. corn ethanol has driven up corn import costs for poor countries, seem like just the proverbial outer layer of the onion.


As the Times story shows, though, the impacts of the biofuel boom go far deeper than just higher import costs. Even though Guatemala grows most of its own white corn for tortillas, soaring international prices, driven partly by biofuel demand, have doubled the price of tortillas for the average consumer. International prices transmit to local markets, if imperfectly and with a lag, and the result is devastating food price inflation for those who can least afford it.

Rosenthal documents the most devastating cost of the ethanol boom: the competition for land. Demand is soaring not just not just for corn-based ethanol but for sugar-based ethanol and for biodiesel made from palm oil. Guatemala has good land to grow all three, and high prices are spurring an agricultural boom in palm and sugar plantations.


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