Wanted: institutions for balancing global food and energy markets

Abstract

The increasing demand for biomass for energy use is further escalating existing food security risks. Managing these risks is a task for global institutions. These should ensure timely investment in the world's capacity for producing biomass and balance the use of this biomass for foods and for non-foods. To achieve this, institutional arrangements for global food markets must fulfil two important goals: reduce the short-term price instability of food markets and prevent a structural scarcity of food in the long term. This paper analyses how agro-food markets, energy markets and biofuel markets are currently regulated. As this regulation is ill-suited to manage food price instabilities and balance food and non-food use of biomass, new institutions need to be put in place. A coordinated system of global commodity management -not unlike the Commodity Control Organization proposed by Keynes for the post-WWII era -is proposed to deal with these coming challenges.

Exploring opportunities for rural livelihoods and food security in Central Mozambique

“…By 2050, worldwide demand for crop biomass will double (FAO, 2009) The key drivers are population growth (Godfray et al, 2010;Koning and Van Ittersum, 2009), income rises in developing countries that might shift human diets towards more animal based foods (Delgado, 2003), and bioenergy initiatives related to energy security and climate change (von Braun, 2008;IPCC, 2007;Cohen et al, 2008;Koning and Mol, 2009). …”

“…land and labour. Cultivation of biomass for biofuel or other cash crops may pose risks to smallholder farmers such as dependency upon biofuel chains and market uncertainty of agricultural commodities (Koning and Mol, 2009). Risk also depends on the type of crops involved, annual versus perennial crops.…”

“…Balanced prices are important. High prices may inhibit access to food for the poor but low prices may hamper investment that should increase employment and moderate the cost of food production in poor countries (Koning and Mol, 2009). In parallel investment is required in creation of sources of income that can absorb the poorest, who produce food for their families and for sale but do not live on it, only survive.…”

“…For large farms, (Delgado, 2003), and bioenergy initiatives related to energy security and climate change (von Braun, 2008;IPCC, 2007;Cohen et al, 2008;Koning and Mol, 2009). …”

Fossil Fuel and Food Security

“…Smil does not address specifically either crop residues or grasses as possible biofuel sources, but his general energetic analysis underscores concerns that extensive exploitation these non-crop biological resources would undermine necessary nutrient recycling. Acknowledging the impact of energy prices on food prices and the volatility of food markets, Koning & Mol (2009) call for new institutions to balance food and energy markets.…”