The Rational Optimist: How Prosperity Evolves

by Matt Ridley

In 2005, the world made roughly ten billion tonnes of ethanol, 45 per cent of it from Brazilian sugar cane and 45 per cent from American maize. Add in a billion tonnes of biodiesel made from European rape seed and the result is that roughly 5 per cent of the world’s crop land has been taken out of growing food and put into growing fuel (20 per cent in the United States). Together with drought in Australia and more meat eating in China, this was the key factor that helped push world food supply below world food demand in 2008 and cause food riots all over the world. Between 2004 and 2007 the world maize harvest increased by fifty-one million tonnes, but fifty million tonnes went into ethanol, leaving nothing to meet the increase of demand for all other uses of thirty-three million tonnes: hence the price rose. The poor, remember, spend 70 per cent of their incomes on food. In effect, American car drivers were taking carbohydrates out of the mouths of the poor to fill their tanks