Food vs fuel debate shakes Canadian breadbasket

By Clarisse Douaud

- Last updated on GMT

Related tags: Agriculture, Biofuel, Wheat

Rising food prices are exacerbating the food versus fuel debate in
Canada's breadbasket region, where critics say ethanol is diverting
valuable commodities away from food markets and proponents say
market economics will prevail.

For food manufacturers and processors, the issue flags yet another direction in which crops are being tugged, and yet another factor on which to keep an eye as prices continue to rise owing to global demand and climactic effects on agricultural production. The province of Saskatchewan is Canada's major wheat-producing region. It holds nearly 50 percent of the country's arable land and approximately 12 percent of its wheat crop has been earmarked for future ethanol production. According to the Agricultural Producers Association of Saskatchewan, around 900,000 tonnes of wheat is set to be used every year in the province to make ethanol. "That has to be replaced from somewhere,"​ Saskatchewan public affairs consultant Ted Boyle told FoodNavigator-USA. "Fewer exporters would be the most likely scenario."​ Boyle recently investigated the province's ethanol production in a report for the Canadian Centre for Policy Alternatives, Biofuels: Bonanza or Boondoggle for Saskatchewan?​ The Canadian government has been pushing the use of grains for fuel in large part as a means to compensate for a struggling grain sector in which producers suffered due to low prices and drought in recent years. Last year, the federal government launched a biofuel capital initiative that set aside C$200mn to lend to farmers engaging in such projects. However, according to Boyle, with rising food prices, farmers have less and less interest in producing for biofuels and as such provincial and federal initiatives are not actually seeing the anticipated growth. "None of that has worked,"​ said Boyle. "I just don't think they're willing to take the risk. They're used to selling food and so when prices go up, they go back to that." ​This, say biofuel defenders, means market economics is naturally determining whether grain is needed for food primarily or not. This, they say, should quell alarmist fears that biofuels will provoke higher prices globally and more hunger in developing countries. "The price of food has gone up, and producers will produce if the prices go up,"​ Judie Dyck, president of the Saskatchewan Biofuels Development Council, told FoodNavigator-USA. Dyck argued that technology for the production of biofuels is also improving and this will solve the issue of food versus fuel. For instance, the so-called next generation of ethanol will likely be derived from agricultural by-products or food waste. In addition, she said, biofuel production will instead help the food industry in the long run by potentially lowering energy prices. "Somehow almost missed in this latest debate is the cost of energy as the driving factor to most consumer food price escalations,"​ Dyck recently wrote. But those advocating sustainable food production say ethanol brings with it a host of new environmental problems, including those caused by the meat production with which it is so often associated. A by-product of ethanol production is used as feed for animals. "If we have expanded ethanol production, we're likely to have more feedlots,"​ Cathy Holtslander, the community organizer for the Canada-wide coalition Beyond Factory Farming, told FoodNavigator-USA. According to the coalition's calculations, in an extreme situation in which 85 percent of Canada's gasoline usage would be replaced by ethanol, 94 percent of current farmland would be required, as well as three times current wheat production. Though such predictions have a long way to go before materializing, they may already be having an effect south of the border. "We have a good sense that the rise in the production of biofuels has had an impact on food prices,"​ John Hoddinott, a researcher with the International Food Policy Research Institute in Washington DC, told FoodNavigator-USA. Meanwhile, Boyle reports that two of the major ethanol plants set up in Saskatchewan have had to resort to burning corn imported from the US, because those farmers who are not obliged under contract to supply the plants have been opting for food crops in light of more attractive returns.

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