The European Union has conducted a (presumably quite expensive) study that proves what anyone with any common sense already knows: when the government subsidizes the production of something, it distorts the market, raises prices, and makes everyone poorer. Or, in this case, hungrier, since subsidizing biodiesel causes the withdrawal of acreage used for growing food crops and assigns it to the subsidized fuel.
The following article about subsidized biofuels was published yesterday by Deutsche Wirtschafts Nachrichten. It was translated from German into Dutch by E.J.Bron, and from Dutch into English for Gates of Vienna by El Rubio:
The curse of the EU subsidies: biodiesel causes higher food prices.
[Caption under picture: “There is just no room to grow real food crops on land where EU-subsidized rapeseed is grown.”]
The European Commission has, after an inquiry, admitted that it has made a big mistake with the subsidizing of biodiesel. The unbridled support of grain culture for energy causes an enormous increase in the cost of food staples. The EU does not know how to exit this vicious circle.
The EU is planning to obtain 10% of its energy needs through renewable sources by 2020. These plans will cause an increase in the price of food staples, and therefore they have received much criticism. Because these prices have already risen enormously over the last few years due to droughts and inflation.
“The use of food crops to produce biofuel instead of feeding the world was criticized,” according to an inquiry ordered by the European Commission. There were many questions about the future demands for biodiesel. That is why the European Commission has recommended the lowering of the production of biofuels. But the implementation of these recommendations remain uncertain.
If the EU were to stop subsidizing biofuels, the demand for biodiesel will drop 81%. The price of biodiesel will then go down 48%. But also the price of food staples will go down.
If the EU were also to then stop subsidizing food staples, then not only would the consumers in the EU profit, but also other parts of the world. Because the increase in supply in food staples in the EU will have an effect on the world market. One result would be that plant-based oils would become 15% cheaper.
Yeah, but these countries produce more than enough to eat anyways. There need is for fuel, so this actually makes sense….as a national and economic security issue. Not relying on the Russians and Muslims for your fuel makes you more independent and less manipulable.
Let the Muslims figure out where they are going to get their food from. Perhaps they will be willing to pay more for it, heh, while at the same time their oil will be worth less.
Supply and demand. Let them eat cake!
Just a note on the organization of this website. This essay, we are told, was translated from German into Dutch into English. Is there no-one on your staff or among your correspondents who can translate directly from the German? I have also noted that your news feed has almost nothing of consequence to report directly from Germany, although we know that many important things are happening there. Just for starters, I suggest linking with JUNGE FREIHEIT and ZUERST! —both very good sources–and perhaps finding someone in Germany who can translated selected articles from these sites and others.
Mr. Radloff —
You have perhaps not read very many posts here at Gates of Vienna. If you had, you would have noticed the dozens — maybe hundreds — of articles translated directly from the German by JLH, Hermes, Rembrandt Clancy, ESW, Tiedar, and a number of other volunteers, not to mention all those subtitled videos that Vlad and Kitman have uploaded.
El Rubio is Dutch, so he finds pieces in his native language and kindly volunteers to translate them for us.
I advise you to observe our site more carefully before issuing such sweeping judgments. Otherwise you may bruise yourself jumping to conclusions.
Considering that the EU is paying billions, if not trillions of euro’s to European farmers to produce NOTHING, then any agricultural land that can be brought back into production would be a bonus. Certainly biofuels is the least of our worries with regard to food prices. ‘Set aside land’ is an ongoing piece of EU smoke and mirrors which serves the purpose of ; keeping farm gate prices high; avoiding embarrassing ‘wine lakes’ and ‘butter mountains’; panders to the green fanatics who want all agricultural land turning, back into wilderness, and us all to live in mud huts, live the lives of hunter gatherers, and be at one with nature. Once they solve the population problem. (Haven’t quite yet worked out that fueling a population explosion in the third world via aid, and then keep packing the overspill into Europe, USA, etc ain’t gonna reduce the population. Never mind O’Bummer is well under way with plan B – get us all to bump each other off)
I’ve noticed that food prices have gone through the roof in the US as well. Wonder how much that has to do with similar biofuel policies here.