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Journalism of Courage
In a scathing yet veiled attack on the developed world, finance minister P Chidambaram today said there was no policy justification for diverting food crops towards bio-fuels. “Converting food into fuel is neither good policy for the poor nor for the environment,” the minister said at a meeting of the Development Committee of the World Bank and the International Monetary Fund, and asked the developed world to cut off subsidies on food crops being for bio-fuel production.
Seeking a global consensus on spiralling prices of food and oil, Chidambaram said, “Unless we act fast, the social unrest induced by food prices in several countries will conflagrate into a global contagion leaving no country, developed or otherwise, unscathed.” The global community must deliberate on steps to reverse the unconscionable increases which threaten to negate the benefits to the poor nations from aid, trade and debt relief, he said.
“These food prices, which hit the poor hardest, are expected to remain firm in the medium term unless we make serious interventions. The demand for bio-fuels will probably increase, and energy and fertiliser prices could be expected to remain high in the medium term,” the minister said. His outburst comes close on the heels of similar concerns expressed by Prime Minister Manmohan Singh last week on use of foodgrains for alternate fuels. “It is particularly worrisome that the new economics of bio-fuels is encouraging a shift of land away from food crops,” Singh had said at a global conference on agro-industries on April 10.
“What this has done is — for the first time, there is a direct linkage between oil prices and food prices. Food markets have got interlinked to oil markets, making food policy an extremely complex and uncertain issue,” the Prime Minister had said. With oil at a historic high of over $100 a barrel, more than 2.1 billion bushels (20 per cent) of the US’s corn crop is now used to produce the bio-fuel ethanol, according to CRISIL. European countries too are using edible vegetable oils to create bio-diesel. Refined rapeseed, or Canola, oil is used for direct injection into trucks as fuel. China uses wheat and rice, besides corn, to manufacture bio-ethanol.
