In the long term, worldwide agriculture has a steep hill to climb. The global population is on the rise and strong economic growth in developing countries is expanding middle classes and increasing demand for agricultural products. We will have to increase food production by 70 per cent to feed a global population of 9bn by 2050. To prepare we need a concerted effort by the private sector, governments and multilateral institutions to increase transparency and market information, increase agricultural productivity and facilitate trade.

In this effort let me also note that the production of corn-based ethanol in the US does not deserve the scapegoat reputation it has too often assumed in this conversation. The truth is that a wide range of factors influence food prices - from fertiliser and energy costs, to weather, political instability and the host of actors who touch food as it goes from farms to mouths. During the great run-up in food and commodity prices in 2007 and 2008, biofuel production played only a minor role - accounting for about 4 per cent of the total 45 per cent increase in US food price inflation.
My view - This claim seems extraordinary given the increasing use of a staple food, known throughout much of the world as maze, in the production of US corn-based ethanol.

My thanks to John Macintosh (a familiar name to veteran subscribers) for pointing out Mr Vilsack's article and also for sending me his response to the FT, which I reproduce below:

Sir,

In your Comment of March 23rd, "How to avoid a global food price crisis", the U.S. Secretary of Agriculture, Mr. Vilsack, defended U.S. corn-based ethanol. To suggest, as he does, that an industry which consumes almost 40 percent of the 350 million ton U.S. corn crop, has a minimal impact on food prices, is disingenuous or stark raving mad. If the industry were to be dismantled today, does he believe that corn prices would be minimally impacted in the months to come? The price rises from ethanol go far beyond corn, other feedgrains and meat. The appetite for biofuels steals acres from many non-bio fuel crops. Ethanol is clearly a major factor in corn's recent rise from $4 to $7, and in the subsequent rise in other food crops.

Mr. Vilsack, ex-Governor of Iowa, ex-Presidential candidate, knows his current constituency well, namely the Midwest farmer. He also recently suggested that CRP, or set-aside, should be increased, taking more land out of production. U.S. corn ethanol was conceived by Midwest politicians and large agribusiness in a time of plenty. It was promoted as a feel-good, home-grown fuel. No mention of the U.S. fertilizer import bill of $9 billion. No mention of ethanol's large footprint from imported fossil fuels. No mention of its terrible gas mileage. Will it take a full-blown world famine for it to be exposed as the Washington boondoggle that it is? Will it take millions of starving people before we view the taxpayer subsidy to ethanol as immoral? The poor of the world already pay over 30 percent of their income for food. I have traded grain for over 35 years, and I have never seen a more precarious world grain balance sheet than today. Mouthing platitudes about limiting volatility and helping the most vulnerable is all well and dandy, but Mr. Vilsack should realize that if he truly wants to avoid a global food price crisis, he should expand his constituency beyond the Midwest to all peoples on the planet

David Fuller's view Well said.


Of Oil, Nuclear Energy and the MENA - My thanks to a subscriber for this thoughtful and informative report which is posted without further comment.