By Jennifer Green

Marketed as a solution to environmental degradation and our dependence on peak oil, biofuels once appeared a promising ‘green’, renewable energy source. Research bodies worldwide published data supporting biofuel use, claiming they can reduce carbon dioxide emissions.

As a result, governments have subsidised a biofuel boom, providing tax incentives to drive a global expansion. The aim? To create thousands of jobs and reinvent the economy of the developing world. The Malaysian biofuel industry provides a model illustration of this, employing over 570,000 workers within its palm oil industry and racking up more than £12 billion export earnings last year.

Yet biofuels have become increasingly unpopular; with sceptics blaming the industry for jeopardising, what the Royal Society recently described as “one of this century’s key global challenges,” food security.

It’s not surprising. Covering an eighth of Malaysia, oil-palm trees are cultivated on over 4.5 million hectares of land. But supply has grown slowly, while demand has soared. The result? A 70 per cent jump in oil prices last year, leaving locals unable to afford oil-based consumables.

The problem is not restricted to Malaysia. Few people dispute there is a global food crisis. In the three decades leading up to 2005, world food prices fell by three-quarters, according to the Economist food prices index. Yet from 2005 it took only three years for prices to rise by 75 per cent, with many crops reaching record highs in 2009.

As a result, violent protests have plagued many developing countries. In 2008, Haiti made headline news after food riots spread across the country. Most Haitians earn no more than $2 a day and struggled to feed themselves as the prices of rice and beans rose by 50 per cent.

And with the added concerns of climate change and a growing global demand for meat and dairy products, economists warn that prices are set to rise further.

As the situation deteriorates, the debate over what role biofuel expansion has played in accelerating price rises has intensified. In July 2009, the World Bank released a report blaming US and EU biofuel policies for causing between 70 and 75 per cent of food price escalation.

“Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate,” the report said.

However a paper titled ‘Evaluating biofuels’ written around the same time by Tim Searchinger, Princeton University’s agricultural specialist, criticised the degree to which biofuels are accused.

“Biofuel critics…have probably exaggerated,” he said. “Crop prices are a small fraction of the retail food prices paid in grocery stores, and an even smaller fraction in restaurants.”

Still, he accepts the increase has had a detrimental impact on developing countries, “particularly on the roughly one billion people who live on $1 per day or less and who are likely to be already chronically malnourished,” he said.

Biofuel demand has rocketed recently, with one third of US maize crops now grown to satisfy it. And this is set to rise further as the Government and transport sectors are pressured to reach ‘green energy’ targets and continue to finance the industry.

However at a ‘Food not Fuel’ demonstration held in London last year, protestors warned that biofuels made from food crops cannot provide a sustainable energy source as the world population grows and requires feeding.

They focused on the recent incorporation of bioenergy into transport sectors such as the aviation industry, deeming it an exploitation of the poor to support rich lifestyles.

“The aviation industry know they have their secret weapon growing somewhere in the poor world and that is biofuels,” says John Stewart, spokesperson for Heathrow Association for the Control of Aircraft Noise. “Flying is largely a rich person’s game done at the expense of the poor. Land will be taken that is needed for food production in the poor world to grow biofuels.”

However the European Association for Bioindustries (EuropaBio) believes sceptics are concentrating on short-term disadvantages. As much of the developing world survives on agriculture, they defend biofuel production by taking into account the potential effects of climate change.

“Global warming could be considered more of a danger than biofuels,” it was stated in a report published by EuropaBio. “The development of biofuels will bring direct opportunities to developing countries because their production will create many local jobs,” it states.

Even though the biggest effects of biofuel expansion are felt in developing countries, the industry has also begun to revolutionise British farming. The National Farmers Union recognised the economic benefit of a UK farmer converting to biofuel production.

“The biofuels market allows farmers the opportunity to add value to crops that would otherwise be exported at minimum price,” they claim. “The additional production of high-protein feed also reduces the need for imports such as soya and maize from USA, Canada, Brazil and others.”

But the benefits of biofuel expansion could be limited to production. Food prices are now fuelling a rise in the average UK family’s shopping bill of £750 a year, taking its toll on low income families.

With an increasing proportion of land allocated to the production of biofuels it is easy to blame the industry for aggravating food insecurity. Yet biofuels have certainly served one purpose by revealing the fragility of our agricultural system.

The sheer number of farmers who have recently abandoned their crops and turned to biofuel production reveals the true extent of an economic hardship that may not have otherwise been exposed for years.

Whether or not biofuels have accelerated a food crisis, they have certainly highlighted the fact there is one. And now the correct treatment must be applied.