11 June 2008
Convergence of Food and Fuel Is “Historic Opportunity”
Farmers, innovators, investors can benefit, Agriculture’s Dorr says
Washington – The current food crisis points to an “historic opportunity for agricultural producers and rural communities around the world,” Thomas C. Dorr, under secretary for rural development at the U.S. Department of Agriculture, told international webchat participants June 10.
The current tension between spiraling food prices and development of alternative fuels is a transitional phase, Dorr said: “The challenge is to provide both food and fuel for a growing world on a sustainable basis.”
He outlined multiple causal factors for rising food prices. “Rising energy costs directly increase food prices,” he said, along with poor harvests and export restrictions on foodstuffs. Although biofuel production contributes to food demand, he said, “when one considers the full range of factors involved, biofuels are clearly not the major factor driving food prices.” He said some of the biggest price hikes were rice and wheat, which are not used for biofuel production.
He also said U.S. corn exports are at a record high, and American grain has not been withdrawn from export markets: “[T]he entire increase in U.S. ethanol production has been supplied from increased corn production.”
Dorr is well-acquainted with agribusiness, having run a family farming company for 30 years.
Webchat questions included several from Bangladesh, India and Pakistan.
Challenged about the contention that new prosperity in India and China is a factor in the food crisis, Dorr responded, “On the contrary, I applaud the growth that is taking place in India and other developing countries around the world,” adding that ideally all countries grow. “The point is simply that we have to identify cost-effective new resources.
“This is in fact a tremendous success story as major emerging economies such as India and China are achieving rapid growth” with improved standards of living for hundreds of millions of people, he said.
“This is the greatest explosion of economic freedom in world history,” Dorr said, but effects include “transitional issues which we must work through.”
Innovation is a primary solution, according to Dorr. “The stone age ended because advancing technology gave people better options,” he said.
“Both in the public and the private sector, researchers in the U.S. are hard at work across the whole spectrum of new energy resources” and renewable and clean energy solutions such as wind power, waste-to-energy, solar, thermal, geothermal power and biofuels. Cleaner refining processes, batteries, and next-generation nuclear power will reduce greenhouse gas emissions, according to Dorr.
“All of these technologies are in play. Which of them will emerge as winners 20-30 years from now is the big question,” he said.
A teacher from South India asked how climbing fuel prices will affect individual car ownership in the world today.
“The modern American lifestyle, with our dependence on the automobile and our far-flung suburbs, was built on cheap oil. As oil increases in price, people will begin to make other choices,” Dorr said. Americans already are making a rapid shift to economical cars and public transport. But, he added, “[E]very country’s situation is unique, and I would not presume that India will choose the same pattern of development as did the United States 50-75 years ago under very different circumstances.”
Questions from Bangladesh and Pakistan concerned region-specific projects for greater energy security.
“America should share agricultural and energy technology with other nations to encourage all to participate in the remarkable new opportunities that are arising in both the food and fuel sectors,” Dorr said, emphasizing the new, high value markets for agricultural products in developing countries. “[M]uch of the world has immense unrealized agricultural potential.” He encouraged investment to modernize agricultural infrastructure to enhance production.
This includes tapping sustainable energy sources such as biofuels from non-food crops, or cellulosic ethanol. “The U.S. Renewable Fuels Standard calls for nearly 60% of U.S. ethanol to be produced from [non-food] feedstocks by 2022,” he said.
“[T]there are many very promising technologies on the horizon,” he said. “The issue is simply at what price alternative fuels can be brought to market, and thanks to technology those prices are being steadily reduced. Change is inevitable, but individuals, businesses, and nations that position themselves to lead this evolution have a remarkable opportunity for long-term, sustained economic growth,” he said.
“Never overlook the fact that individual ingenuity has historically improved the lot of mankind, and we see no reason to suspect that will not continue to be the case,” he said.
The transcript of Dorr’s webchat is available on America.gov.
