India: The edible oil crisis

[GliderGuider]

http://www.business-standard.com/opinionanalysis/storypage.php?leftnm=lmnu5&subLeft=&autono=280547&tab=r">Edible oil crisis

At 23.3 million tonnes, this year's production of edible oils is below the 24.4 million tonnes harvested even a decade ago.

An edible oil crisis is around the corner though policy planners do not seem to realise this. The oilseed production has dropped this year by a whopping 17 per cent to 23.26 million tonnes, falling below 24.38 million tonne harvested a decade ago in 1996-97. The dependence on imports for meeting the needs, which was a mere 3 per cent in the early 1990s, has shot up to over 40 per cent. What adds to the worry is that the edible oil availability in the international market is likely to dwindle due to the large scale diversion of these oils to bio-fuel production. This may make it difficult even to import enough edible oils.

The signals are out there. Is anyone going to listen?

[Tyler Durden]

1. something else for me to stock up on.

Since the majority of the country (and the world) seems to think that cars are still such a great idea, I'm looking for long-shelf life oils to stock up on in the basement, next to the huge stack of canned veggies and bottled water.

[brokensymmetry]

2. Short answer? No.

The signals are out there. Is anyone going to listen?

Over the years, there have been lots of signals, lots of warnings.

Were they listened to? Nope. They were derided and ridiculed
time after time after time.

No one will listen until an out-of-work father has to tell his
children who are crying due to hunger that there is no money and
he cannot feed them.

Oh, wait...that's already happening, isn't it?

[GliderGuider]

3. I think I'm going to make up a "guerilla marketing" sticker to slap on biofuel pumps.

Something like this should get peoples' attention:

[phantom power]

4. Not that I disagree, but didn't I see you driving a biodiesel car on the news?

[GliderGuider]

5. Yes you did.

:blush: I adopted my current position on biofuels just after we completed that shoot, and it was too late to redo it.

[phantom power]

19. Hey, at least it could also run on synthetic diesel.

My car burns pure fossil carbon, so I'm the last person who's going to throw stones.

[GliderGuider]

21. I don't worry about it - I'm not Al Gore

It does feel odd, though, being more comfortable defending an anti-biodiesel position as a PO/GW activist.

[jpak]

7. Good luck with that

Maybe you should paste those on tractors in Iowa...

[GliderGuider]

9. Wrong target.

I'd like to paste them on ethanol pumps inside the D.C. Beltway. This situation isn't the farmers' fault, they're just following the money. The real villains of the piece are the policymakers.

[jpak]

11. Good luck with that too

and make sure you send some to all those "Democrat" ethanol villains in the US House and Senate...

[GliderGuider]

13. Absolutely

There are Democrats who are just as beholden as any Republican to the agribusiness and coal lobbies. Those boys are equal opportunity corrupters.

[jpak]

14. Farmer-owned coops produce more corn ethanol than all of US agribusiness combined

Farmers vote - ADM does not.

An anti-ethanol policy would be a non-starter in the Farm Belt and a losing proposition for farm state Dems.

and what does the coal lobby have to do with this?

look out! a canard!

:evilgrin:

[GliderGuider]

16. Farmer owned co-ops get the same subsidy money as the big guys

They typically don't lead in lobbying Congress for subsidies, though they do participate in the endeavour as spear-carriers. The lead roles fall to the ADMs and Cargills of the world, who know clearly which side their bread is buttered on.

The reference to coal is a tip of the hat to the fact that politicians can be bought by large business interests no matter how deleterious the side-effects of those businesses may be.

[jpak]

26. Where was this picture taken and what role did biofuels play in this situation???

My bet is that biofuels had nothing to do with this.

What horseshit.

[GliderGuider]

30. Ever been in the advertising business?

It's all message.

[jpak]

32. and the message is BS

Sorry if I don't find mixing intellectual dishonesty and dead babies amusing...

[GliderGuider]

36. So it appears to be effective, then.

And it's not meant to be amusing, it's meant to make people think rather than just pump gas.

[jpak]

37. Yes - the "L-word" comes mind here - like Iraqi WMD and ties to Al-Queda

That ad campaign was "effective" too and really did kill babies.

and, yes, it will make people think that the anti-biofuels folks have no credibility whatsoever.

[GliderGuider]

38. So do you see any potential for damage due to the use of biofuels?

In your opinion is there any risk associated with the generalized use of biofuels? If so, what do you think should be done to avoid it? To what extent should the Precautionary Principle be applied here? Is there any reason to urge people not to use biofuels indiscriminately? If so, what level of persuasion do you think would be appropriate?

I admit I designed that sticker to be as shocking as possible. That's in line with my conclusion that the indiscriminate use of biofuels presents a potential danger so great that it warrants such tactics. You obviously disagree with where I've drawn the line. Where would you draw it?

[jpak]

39. I think the potential damage for *not* pursuing biofuels is greater than any fake food crisis

Reducing greenhouse gas emissions is a "must do" thing - global warming is the *real* threat to global agricultural production and biofuels are part of the solution.

The food and biofuel markets will work themselves out - we cannot divert all our ag production to biofuels and grain prices will stabilize (or drop) as soy and corn production increase to meet biofuel demand.

Pressed oilseed meal and distillery mash production will be part of that economic equation and could help stabilize corn and soy prices as well.

Peak Oil and Gas (and global warming) will force US agriculture to practice organic methods - there are no alternatives - and it will force farmers (or farm coops) to produce biofuels for farm use. Mechanized farming is far more productive than the use of draft animals (that would require pasture and cropland to feed them) and won't go away.

Most, if not all, of future US biofuel production will be used to maintain agricultural output - and not to maintain our current car culture.

If there is no biofuel infrastructure in place to make the transition to the post-Peak Oil era, there most certainly *will* be a global food crisis.

That's the way I see it.

[JohnWxy]

40. Cotton exports by US, supported by export subsidies are what Africans are concerned about.

Suggest you get informed before you try to be 'profound'.__JW

http://www.un.org/ecosocdev/geninfo/afrec/vol17no1/171agri4.htm

Mounting opposition to Northern farm subsidies

African cotton farmers battling to survive

By Gumisai Mutume

~~
~~

But the collapse of the cotton price on the world market -- it has fallen by 54 per cent since the mid-1990s -- threatens the very existence of communities such as Logokourani. "Cotton prices are too low to keep our children in school, or to buy food and pay for health," notes Mr. Brahima Ouattara, a small-scale cotton farmer in Logokourani. "Some farmers are already leaving. Another season like this will destroy our community."

~~
While the major factors behind the declining price are varied and complex, the most significant is the increase in government subsidies paid to cotton farmers in the US, some analysts say.
~~
The non-governmental organization Oxfam argues that production and export subsidies in the US have devastated not only small communities in Africa, but entire regions. In a study on the impact of US cotton subsidies on Africa, Cultivating Poverty, released in September, the NGO outlines the devastation through a series of interviews with small-scale farmers on the continent, including Mr. Ouattara.

During the 2001/02 season, the US spent about $3.9 bn on subsidies and other supports to its 25,000 cotton farmers, the NGO notes -- double the 1992 figure. These subsidies have encouraged overproduction in the US, resulting in the flooding of the world market by cotton sold at prices less than it costs to produce. This has depressed prices to levels at which competitors struggle to survive.
-------------------------------------------------------------------------------------------------------------------------------

If you really want to argue for something worthwhile, argue for the end of cotton subsidies which allow U.S. to export cotton at artificially low prices. These subsidies (4$ Billion/yr) go to just 25,000 farmers(actually a number or these "farmers" are corporate farms). And they are devastating the lives (even economies) of far more people in Africa.

this is happening RIGHT NOW, not twenty years in the future. People who a few weeks ago were saying biofuels would never amount to anything are now talking like biofuels will grow at 1,000% per year! Let's get real here, it's not going to grow that fast.

[jpak]

6. Umm...you forgot to post this part of the OP...

<snip>

Some recent policy moves bear out the government’s lack of appreciation of the gravity of the situation. For one, while the minimum support price (MSP) of wheat was hiked effectively by a whopping Rs 200 a quintal, including bonus, that of edible oilseeds was kept unchanged at last year’s level. This was a clear signal to the farmers to divert area from oilseeds to wheat, which they actually did. Consequently, the output of the rabi oilseeds, notably rapeseed-mustard, declined sharply by 16.3 per cent to 9.38 million tonnes, against 11.21 million tonnes in the last season. Besides, the slashing of import duties on edible oils, even if in phases, is another move that can be interpreted as a preference for imports over domestic production.

<more>

Wheat isn't used for biofuels and this so-called "crisis" was the result of Indian government policies *not* biofuels.

Nice try though...

[GliderGuider]

8. Grain and oilseeds are fungible crops.

There are global markets for these commodities. If market forces cause shifts in global production away from food crops and toward fuel crops as well as sales of food crops into the higher-value fuel industry, then there will eventually be aggregate shortfalls in the food available for human consumption. The issue here is not that Indian policies created a shortage, but that the global market in the shorted crop is tight due to global biofuel demand. This situation will cause price rises or frank lack of supply, making it more and more expensive to alleviate the shortage through imports. The world's food market is tight enough that small disturbances like those caused by the re-allocation of food production to fuel crops will ripple though the global economy, to the detriment of people who need food rather than fuel.

[jpak]

10. Less than 3% of the world's small grains production is used for biofuels

The recent IPCC report clearly stated that global warming is a clear and present threat to global food security.

Biofuels are not.

Furthermore, biofuels are part of the answer to that crisis which - unlike the *fake* biofuels famine - is real.

[GliderGuider]

12. "At the moment" less than 3% of the world's small grains production is used for biofuels

Even 3% should worry anyone who knows how to extrapolate. Biofuels are an answer to part of the problem of preserving a happy motoring lifestyle. A much more effective curb on greenhouse gasses would be to Stop All The Fucking Driving.

I'm a firm believer in the Precautionary Principle, and I think there's enough potential downside to this direction that we should be erring on the side of caution. We need an equivalent amount of mental horsepower going into the policy analysis as into the R&D.

[razzleberry]

15. how do you stop people from burning corn in a stove ...

how do you stop people from burning corn in a stove,
when it is much cheaper than fuel oil?

[GliderGuider]

17. Of course you can't

But burning corn in a stove isn't a highly-developed, ultra-efficient industrial undertaking like the conversion of rapeseed into truck fuel. Burning corn in a stove may be more cost-effective than buying fuel oil for an individual if the corn is readily to hand. Try scaling that up to heat a city though, and you rapidly run into factors that make it a lot more expensive than fuel oil

You can't scale up burning corn for heat to the point where it might be a threat to the food supply - unless oil becomes quite scarce and much more expensive, of course. Oh, wait...

[razzleberry]

18. you can't stop dozens of small countries ...

from buying corn, oilseed, whatever,
.
.
and turning it into what is
essentially an anonomous commodity -->
fuel oil or fuel alcohol.

telling Carribean countries not
to make fuel alcohol is like
telling the tide not to go up and down

industrial alcohol, for a solvent, is not new

........edit, adding .............
just curious,
what do you think of the
US's one buck subsidy of biodiesel?

[GliderGuider]

20. I agree. That's why I'm so worried about it.

One way to stop this would be for the large fuel-using nations to put legislation in place to discourage or outright ban the importation of biofuels, and for the nations at risk to pass legislation forbidding the export of biofuels. As this will probably never happen, I think we are in for a long, agonizing process of ratcheting up the substitution of food for fuel. The USA will be able to buy all of both that it needs to support its supersized driving culture. This means that biofuel exporting nations may be asked to pay for that with their health.

It's one more externality, and one that only affects people in other countries. Hey, if they make bad decisions about what to grow and export, that's their problem, right?

[Chemical Bill]

24. Perhaps you would be better off...

pushing for laws against building on cropland. Here in the states, I suspect that more food production has been lost to housing than to biofuels.

Also, meat production uses about 17 times the land that veggie production would to grow the same amount of protein. Do you post much advocating a vegetarian diet? As you no doubt know, biodiesel in the states is almost wholly sourced from oil that the meat industry would otherwise discard, making biodiesel here free from "stealing food from the poor" blame. It's the steak that steals the food from the poor. Close down the steakhouses, and then we'll talk.

Bill

[NickB79]

25. Since the vast majority of Indians eat almost no meat

I doubt the problem in India is that they are supporting the cattle industry.

[Chemical Bill]

31. As the source states,

India is diverting farmland to grain production.

Bill

[NickB79]

41. You don't feed cattle wheat

"Some recent policy moves bear out the government’s lack of appreciation of the gravity of the situation. For one, while the minimum support price (MSP) of wheat was hiked effectively by a whopping Rs 200 a quintal, including bonus, that of edible oilseeds was kept unchanged at last year’s level. This was a clear signal to the farmers to divert area from oilseeds to wheat, which they actually did. Consequently, the output of the rabi oilseeds, notably rapeseed-mustard, declined sharply by 16.3 per cent to 9.38 million tonnes, against 11.21 million tonnes in the last season. Besides, the slashing of import duties on edible oils, even if in phases, is another move that can be interpreted as a preference for imports over domestic production."

The government used price supports to get Indian farmers to switch from oilseeds to wheat, a human food source, not a cattle food source. Again, eating meat has nothing to do with this particular news story, since Indians have a very, very low per-capita meat consumption with most of that being from fish, not beef.

[Chemical Bill]

42. If your point is that the OP has nothing to do with the USA,

I agree.

Bill

[GliderGuider]

27. On my web site I have a list of things one can do

Number four on my list of ten items is to stop eating meat.

I'm a also member of the Canadian National Farmer's Union. It's a union dedicated to the return and preservation of the family farm, local and CSA agriculture, promoting sustainable agricultural practices and fighting the monopoly hold of agribusiness. It's a hell of an organization - what other farmer's union would feature a report from ASPO-Boston and an article by Richard Heinberg in their quarterly newsletter?

The reason I picked crop-based biofuels rather than meat to work against is that meat-eating is a genetically supported human activity. As such it is much less amenable to modification through moral argument. There is no genetic imperative to use biofuels, so I picked the battle I was more likely to win.

[Chemical Bill]

29. > I picked the battle I was more likely to win.

I'm sorry, I totally disagree with your priorities. Here in the states our oil habit is killing people, now. If an alternative to bloodshed in Iraq is available, I'm going for it.

Bill

[jpak]

33. Got a published DNA sequence for that "meat eating gene"...I'd like to see it.

Also, firewood is a "biofuel" used by humans for many many thousands of years.

I seriously doubt there is a "gene" for that either.

Biofuels have sustained human populations well before the rise of agricultural societies and will continue to provide *sustainable* energy services to human societies well into the future (in spite of what the naysayers have to say about them).

[GliderGuider]

35. The fact that our dentition includes incisors is a bit of evidence, no?

I mentioned in another post that humans do use exosomatic energy whenever it's available. That's due to a combination of our survival instinct (another genetic component) with our intellectual ability to recognize and manipulate energy sources. The difference is that we will use various energy forms preferentially according to their perceived cost, with no intrinsic preference for a particular source as long as it fills our current need. So as long as the cost of one or the other energy source can be made to seem unacceptably high people will readily avoid it as long as alternatives are available. Nuclear energy is a good example of this, and frankly I'm hoping to transfer a similar stigma onto biofuels.

Yes, biofuels powered an agrarian society (at least until most of Europe and Britain were deforested). They could do so again, but you do run into a problem of scale with the society we have at the moment. If the world's population was reduced to a half billion or so farmers I wouldn't have many worries about the sustainability of biofuels. With 6.6 billion of us living in a global industrial society, though, I think concerns about sustainability and knock-on effects are reasonable.

It's not biofuels per se I have a problem with, you see. It's our current production techniques for biofuels considered within the context of our enormous global civilization and impending petroleum depletion. Oil depletion is what worries me most, because as I said above, "we will use various energy forms preferentially based on perceived cost, with no intrinsic preference for a particular source as long as it fills our current need." If petroleum becomes expensive and scarce I expect we will use whatever energy sources are available, and damn the consequences. The only hope for preventing catastrophic outcomes from that usage (given that our population situation remains unchanged) is for enough people to become aware of the issues to put some kind of brake on the more egregious misuses.

[jpak]

43. Human dentition is omnivorous - no meat eating required,

Meat eating it's not a genetic or physiological mandate

Millions of humans do not eat meat (or animal protein) and are doing just fine.

They can even eat soy meal by-product from biodiesel production.

The horror!!!

[GliderGuider]

44. No comment on the substance of the post?

You're flailing away at a strawman, you know. I acknowledged long ago that eating meat is a horrifically inefficient and globally damaging practice with this many people to feed. People do just fine as vegetarians, just as some have thrived for millenia on essentially a pure-meat diet. Debating this adds nothing to the discussion.

Any comment on my actual points about the observed patterns of human energy use and issues of scale?

[Chemical Bill]

22. Sorry,

my biodiesel doesn't come from India. My biodiesel is made from waste oil left over from soy meal for meat animal feed. If you feel so strongly, you should start a program to feed people in third world nations, instead of spending your time posting these misleading articles.

Bill

[GliderGuider]

23. Just because your biodiesel comes from waste doesn't mean everyone's does.

What exactly is misleading about the article? It basically says that India is experiencing a shortfall in oilseed production due to government policies, and they are worried about plugging the gap due to the global reallocation of oilseed crops to biofuel production. There's not much controversial in that.

I take it a step further, and worry about that last bit, "the global reallocation of oilseed crops to biofuel production." I see a potential for harmful knock-on effects within the global food supply if this trend grows unchecked.

What do you feel is misleading?

[Chemical Bill]

28. >What exactly is misleading about the article?

See post #6.

My B-I-L owns a palm oil plantation in Nigeria, and he can't sell his oil because China sells soy oil for cooking very cheaply there. That tells me that your warnings are not universal, and your predictions are just guesses.

>India is experiencing a shortfall in oilseed production due to government policies....

Policies that are advocating more food from grain, and less oils seed crops, as your source states. I am not convinced that that is in any way related to my using American grown, American made biodiesel, which is what I infer from you posting here at DU that biofuels are bad.

>...if this trend grows unchecked.

You are advocating from a position of a guess about the future. My prediction is that biodiesel will be made from algae that is grown in pools that are not on cropland. Ethanol will be made from crops grown on land unsuitable for food. I'm working to make my prediction a reality. You can join me if you like, you don't have to.

I don't like that ethanol is made from corn, but I like it better than fuel obtained from the blood of Iraqis. When you have a better alternative, I'm all ears.

Bill

[GliderGuider]

34. The basis of my prediction

The basis of my prediction of a growing trend of food-fuel substitution is based on two things. The first is the observed tendency of humans in aggregate to consume whatever energy resources are available, in the quantities available, up to some very elastic economic limit. This has been demonstrated time and again, with wood, coal, natural gas and petroleum, so it's reasonable to expect it to hold true for biofuels as well. The second is that this trend is already happening. As you point out, the effects are uneven so far, but then it's still very early days for this technology, and early effects are always uneven. However, a quick glance at the proportion of the US corn crop devoted to ethanol over the last few years is instructive.

On the other hand, the growth of algal biodiesel or cellulosic alcohol is not assured. As long as fuel from these sources remains more expensive than fuel from crop sources it will be out-competed. There is as yet no assurance that such sources will become economically competitive. They may, but the level of certainty attached to that prediction is much lower than that attached to mine (that an already observed trend will continue).

The hope that biofuels will somehow render the US independent of foreign oil or reduce the temptation for resource wars in an energy-constrained world is undone by an examination of the scales of the problem and the proposed solution. It's good to want the wars to stop, but putting biofuel in your gas tank for the drive to Wal-Mart isn't going to do it.

I do have a solution. Radical conservation, electrification of transportation (especially intra-city public transit and inter-city rail) and thwarting big agribusiness are all part of my agenda. The generalized use of biofuels is not.

[NNadir]

45. Well put.

A big one is the electrification of transportation. This should be a focus of infrastructure building, not that we build infrastructure anymore.