In Britain, surging grocery prices are painful, but not life-threatening. For much of the rest of the world, by contrast, food prices are a matter of life and death. China, the world’s largest wheat producer, is suffering a severe winter drought that looks likely to devastate this year’s harvest. It is setting aside a billion dollars to snap up supplies in the market, with the inevitable result that other, poorer countries will lose out. When global food costs surge, starvation usually follows.
At times like this, it is harder than ever to understand why we in the West are encouraging farmers to grow crops to fill petrol tanks, rather than people’s stomachs.
The biofuels fad is one of many expensive and woefully ineffective ways of replacing our dependence on fossil fuels. In the United States, a quarter of all grain harvested is sent to ethanol distilleries to produce fuel for cars - enough to feed 350 million people for a year.
The British government has its orders from the European Union: Biofuel must constitute 10 per cent of this country’s transport fuel by the end of this decade.
One of the greatest mistakes in politics is to judge a policy by its intentions rather than by its results, intended and unintended.
The OECD estimates that more than half of the last global fuel price hike was caused by the setting aside of farmland for biofuels.
It is likely to be at least as much this time around. And for what? Converting land for inefficient crops is itself a carbon-intensive process. Factor in that, and the amount of carbon saved from switching to biofuels becomes embarrassingly small.
Moreover, Europe’s biofuels industry is not competitive. It needs heavy subsidy and protection from foreign competition. Taxpayer support to EU biofuels production has reached such absurd levels that, according to a study by the International Institute for Sustainable Development, it would be 20 times cheaper to continue using fossil fuels and buy carbon offsets instead.
A biofuels policy that already teetered on the verge of economic madness has been tipped over by new EU plans to slap tariffs on biofuel imports from emerging markets whose farmers can, unlike ours, grow it at a profit. This is typical of the Common Agricultural Policy, a deplorable racket which not only means we pay more for food, but ensures we keep African farmers on their knees by refusing to trade fairly with them.
Our policymakers talk about ‘fighting poverty’ with state aid - while denying the third world the more powerful tool of free trade.
For all its pious intentions, the biofuels agenda has quickly become yet another scam to create another subsidy. Brussels is writing a new chapter in the ongoing scandal of agricultural protectionism.
It was not increasing farm subsidies that made the Soviet bread queues disappear. It was opening up trade with the rest of the world. As Rod Liddle says on page 17, politicians are good at giving away taxpayers’ money to show that they care. But a real reform would be to scrap a Common Agricultural Policy that has become economically, politically and morally indefensible.
