Monday, February 25, 2008

Who's Making the Dough?

Global warming is still making headlines these days, but in a way that environmentalists had never predicted, in the form of increased prices for bread and pasta products.

Wheat prices are setting new records at the Chicago board of trade, giving many prairie grain farmers an optimism that they haven't experienced since the late 1970's. To the end users of the cereals such as livestock producers and bakeries the the rampant rise has severely cut into profits. While latter industry can simply pass the increase along to their customers, the beef and hog producers simply have to suck it up as lost revenue.

The doubling of wheat prices in the last couple of months has resulted from a number of factors including a two year drought in Australia and the flux of farmers switching to more lucrative crops such as corn and canola to feed the biofuel industry. While the Australia's problems can be solved by a timely rainfall or two, the burgeoning ethanol and biodiesel facilities are only slated to consume an ever increasing amount of what used to be food.

To many North American consumers, the doubling of the price on a loaf of bread is an annoyance, to the one quarter of the worlds population that survives on a dollar a day it is catastrophic. Even the director of the United Nations World Food Programme has said it is considering plans to ration food aid because of rising prices and a shortage of funds.

Not surprisingly the people who are hardest hit are countries like Afghanistan, where prices for staples have gone up 80% pricing many families out of the food market. Even middle class urban families in Indonesia, Yemen and Mexico are forced to sacrifice education and healthcare in order to put dinner on the table.

How does ethanol and biodiesel production really fight global warming? Since there is direct link between world population and carbon dioxide production, using food grains to power vehicles while letting the poorest of the poor starve to death will dramatically decrease the number of people living on this planet. Less people equals less carbon dioxide so lets all save the planet by filling up with "Mother Natures" gasoline.

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