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10 June 2008
Agriculture Official Thomas Dorr Discusses “Food Versus Fuel”
Ask America webchat transcript, June 10
Thomas C. Dorr, U.S. under secretary of agriculture for rural development, discussed issues surrounding the “food versus fuel” debate in an Ask America webchat June 10.
Following is the transcript:
(begin transcript)
U.S. DEPARTMENT OF STATE
Bureau of International Information Programs
Ask America Webchat Transcript
Food versus Fuel
Guest: Thomas Dorr Under Secretary USDA
Date: June 10, 2008
Time: 9:00 a.m. EDT (1300 GMT)
Moderator: Welcome to today's webchat! We're looking forward to your questions and comments. The live webchat will begin at 09:00 EDT/13:00 EDT.
Moderator: Hello everyone! We'll get started in just a moment.
Thomas Dorr: Good morning, and welcome. I am glad to have this opportunity to discuss the issues surrounding the food and fuel debate. Thank you for joining us.
We live in an era of rapid technological change. Energy and agriculture are both being transformed. In a world in which BTU’s [British Thermal Unit] and calories are now fungible, agriculture is moving from food, feed, fiber to food, feed, fiber, AND fuel. This is a historic opportunity for agricultural producers and rural communities around the world.
This dynamic increase in demand for food and energy is a direct result of the fall of the Iron Curtain. Several billion people over the last 15 years are in the process of attaining middle class stature. Their expectations have escalated and what we are seeing is truly a success story. In that vein I believe we would do better to discuss this in terms of food and fuel, as opposed to food versus fuel.
I look forward to discussing these challenges and opportunities today.
Question [Raissa]: HI! I am not a specialist but I think the food crisis that has started recently was caused by Europeans that starred to make fuel from food. May be it is better to feed hungry people than to spend so much food for fuel? Perhaps it is the time to begin propaganda on riding bicycles, not driving cars? Raissa
Answer [Thomas Dorr]: The price of agricultural commodities is rising for several reasons. The most important, in the long run, is rising demand. This is in fact a tremendous success story as major emerging economies such as India and China are achieving rapid growth. We certainly applaud this development. Hundreds of millions of people are joining the global middle class -- and as standards of living improve, so do diets. It should be noted that some of the biggest price increases have been for commodities such as rice and wheat, which are not biofuels feedstocks at all.
In addition to rising demand, other factors are at work as well. Rising energy costs directly increase food prices. Several major wheat exporters have recently suffered poor harvests. A number of countries have also imposed export restrictions on foodstuffs which have disrupted normal supply patterns in global markets, which has driven up prices. Biofuels production also contributes to demand but, when one considers the full range of factors involved, biofuels are clearly not the major factor driving food prices.
It is important to note that U.S. corn exports are currently at a record high. The U.S. has not withdrawn grain from export markets; the entire increase in U.S. ethanol production has been supplied from increased corn production. From April 2007 to April 2008, the International Monetary Fund global food commodity price index rose 45.6%. Even if there had been no increase at all in U.S. ethanol production, so that the entire increase in U.S. corn harvests had been available for export, we estimate that the index would still have risen by 39.8%.
Q [father]: there will be there many power resources finished soon, like petrol, and many think, so how can we make the plant be full power (is it by making it green or using the water that we drink and also it can finished. The answer I think is how to use the sea water)
A [Thomas Dorr]: There is an old saying that the stone age didn’t end because our ancestors ran out of stone. The stone age ended because advancing technology gave people better options. The same thing is happening with regard to fossil fuels. Oil, coal, and natural gas have been the dominant fuels for the past century because they have been abundant, convenient, and cheap. As costs rise, however, many alternatives become economic. There is no shortage of potential new sources of energy. The question is which of the many alternatives will win the economic contest and emerge as the most cost effective solution.
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. The U.S. has led the world in new installed wind capacity in each of the last three years. We lead the world in biofuels, waste to energy, solar thermal, and geothermal power. We are aggressively working on a wide range of solar technologies; improved batteries; hydrogen fuel cells; clean, safe, next-generation nuclear power; and carbon capture technologies to permit the burning of coal while eliminating the emission of greenhouse gasses. All of these technologies are in play. Which of them will emerge as winners 20-30 years from now is the big question.
Q [kleen]: what is real reasons of this crisis and what is the solution and the role of USA to solve the crisis?
A [Thomas Dorr]: Global economic growth is a good thing, and we applaud the immense strides a number of emerging nations have made in recent years. Since the fall of the Berlin Wall, nearly three billion people have joined the world market system. This is the greatest explosion of economic freedom in world history. This has many effects, of which rising living standards are the most important. There are, however, transitional issues which we must work through. Commodities are being revalued across the board; food is affected, but so is everything else as well. In particular, the surge in global energy demand has exceeded most peoples’ expectations, and energy producers are scrambling to catch up.
The solution to these pressures is innovation. Higher prices hurt at the gas pump and the grocery store, but they are also signals to producers around the world to invest, innovate, and bring new resources to market. This is an opportunity for innovation and growth. Markets work, if we let them.
The United States is investing heavily in basic and applied research on both energy and agricultural production. There is a great future ahead for those who participate in these new frontiers.
Q [Balaji]: Hello, I am Valsa, a teacher & administrator in an institution in South India. The recent hike in fuel prices makes me wonder whether owning a vehicle is a bane for a Middle class citizen whose dreams of commuting by his own car becomes now a distant dream. Can this be food for thought for the layman in a developing economy?
A [Thomas Dorr]: 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. We are already seeing one impact in the form of a very rapid shift in consumer preferences in new automobiles. In the long run, residential patterns may be affected as well. But every 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. India is to be congratulated on its very rapid economic growth. Clearly more and more people in India are now able to afford a car, and that number will continue to increase. So you will have a choice. The answer is up to you.
Q [Khawaza Main Uddin]: Khawaza Main Uddin, Special Correspondent, New Age/Dhaka: Will/should America stop bio-fuel production to encourage other countries to follow? For energy security, should the world not go for area/region-specific energy projects [such as solar power, nuclear power, using renewable means other than corn] so that the issue of food security is not undermined at all? What is the right path, in your opinion, for countries like Bangladesh?
A [Thomas Dorr]: 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. Biofuels are one of these new opportunities. They are, in particular, an enormous opportunity for agricultural producers in third world countries who now have new, high value markets for agricultural products. I would urge you to focus on the opportunity. With regard to food security, I would note two things. First, much of the world has immense unrealized agricultural potential. The rise of biofuels is an invitation to countries that have not done so to invest in and modernize their agricultural sectors. Second, the next step for biofuels is the development of non-fuel feedstocks. In the U.S. the first commercial scale cellulosic ethanol demonstration plants are being built right now. The U.S. Renewable Fuels Standard calls for nearly 60% of U.S. ethanol to be produced from advanced feedstocks by 2022, so we clearly anticipate rapid progress in this area.
Q [Milan Petrunov]: It is considered to be immoral to produce oleaginous plant and grains biofuel while somewhere someone is starving.
But isn’t it also immoral to clear forests while the planet is overheating so that someone’s 17th child born with no hope for better tomorrow could survive until ecological cataclysm on 55 degrees Celsius?
A [Thomas Dorr]: The world economy is not a zero-sum game. Since the fall of the Berlin Wall, nearly three billion people have joined the world market system. This is the greatest explosion of economic freedom in world history. Several major third-world countries led by China and India are achieving remarkable growth rates. This is a historic success story. A major challenge for the world economy is therefore to accommodate this growth by developing new, clean, and sustainable energy resources. Biofuels have a role to play, as do wind, solar, geothermal, hydro, next-generation nuclear, hydrogen fuel cell, clean-coal, and other sustainable technologies. On the energy efficiency side of the equation, many technologies are in play as well. The United States is aggressively pursuing all of these options.
Q [Milan Petrunov]: Isn’t it true that the solution lies in strengthening public transportation to the detriment of the individual one, especially in large conurbations and megalopolises, with an aim to save fuel polluting the atmosphere and thereby save food for the hungry and the poor and moreover the fuel is easier to pay by means of a bus fare rather than at a gas station?
A [Thomas Dorr]: The challenge is to provide both food and fuel for a growing world on a sustainable basis. Transportation planning will vary from place to place, but clearly, personal mobility is an important social good. 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. If ultimately public transportation meets individual preferences, and is cost-effective in a market economy, it will succeed.
Moderator: If you would like to introduce yourself to our group or comment on this issue, please select the "comment" option.
Comment [romi]: hi thank for every body
Comment [Colombia]: I THINK BOTH IT´S NECESSARY FOOD AND FUEL,THE PEOPLE AROUND THE WORLD NEED UNDERSTAND THE PROBLEM AND TRY DON´T SPEND FOR NOW,THE COUNTRIES BE AN EFFORT SEARCH FOR OTHER SOLUTION, DIFERENT TO FUEL.
Comment [Harish]: I guess a multi pronged approach is required urgently to fight the Energy Crisis. Conservation of available resources, creating public awareness on effective use of fuels, investing in alternative energy technologies, and evolving a Global Consensus on handling the Energy issue are some of the key aspects which deserve the attention of people who are dealing with the Crisis. Prioritising the use of fuel is very crucial, which should be approached apolitically and with out any regional bias.
Q [Ringo]: Dear Mr Dorr, Food vs Fuel - sounds tempting, but at the same time a little dangerous, doesn't it? Surely millions of people all over the world are suffering from lack of the foodstuffs. What would your offer them instead? I mean natural food, you see, not so-called `genetically modified organisms` that have became already `the talk of the town` and `the scourge of latest times`. Because an outward plenty of food does not means useful food yet, you know. Certainly, oil, coal and other natural energy vectors (excepting perhaps wind and solar energy) are irreplaceable sources. So a way should be worked out, regarding their conservation and efficient use - as efficient as possible. What could you say about scientific researches in this area?
In general, might we expect some significant achievements in nearest future?
Cordially,
Ashot Gareginyan, journalist.
Yerevan, Armenia
A [Thomas Dorr]: Countries will have to make their own decisions about technology. The United States has enjoyed very significant productivity gains in agriculture thanks to genetic research. I would anticipate that this will continue and very likely accelerate. As it does, countries that fail to embrace technology risk falling ever farther behind. The solution to the world’s resource pressures is innovation.
As I’ve already noted, there are many very promising technologies on the horizon. There is no “energy shortage.” 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.
Moderator: Under Secretary Dorr continues to answer your questions. Thank you for your patience.
Q [Kuba]: Sir, this topic is most timely. In Europe you may know about protests by drivers of transport vehicles due to high fuel cost. In U.S. you now cross a price threshold for first time.
U.S. has largest production capacity for agriculture in the world (correct?): So why not simply put 100% of farm land to use and divide proportionally on food versus fuel crops?
A [Thomas Dorr]: What we are experiencing with today’s dramatic increases in price for food and fuel are not unprecedented. We’ve incurred similar price rises in the early 70’s. The assumption then, as today, was that we were running into long-term shortages. Then, as today, we were coming off long periods of depressed commodity prices and infrastructure development. Internationally there had been a lack of investment. The United States response in the 1970’s was to impose export embargos and wage and price freezes. This had severe negative impacts on global commodity prices, while short-circuiting increased production. We now recognize that the United States’ response at that time was wrong.
Since 1980 internationally, we have experienced flat commodity prices. These deflated prices, in conjunction with substantial global economic growth, have created these energy and food price pressures.
There are large sustainable international tracts of under-utilized farmland. There are production technologies which are unavailable to many areas of the world due to self-imposed restrictions. The lack of open and free international trade also impedes available access to these commodities.
A greater willingness to address these issues and focus on opportunities and open markets, as opposed to creating obstacles will resolve many of these issues quite quickly.
Q [Chat Participant]: Hello All! This is Nalin, I am a MBA Student at ISB, Hyderabad, India
A [Thomas Dorr]: I'd like to respond to Colombia's comment above. The world needs more food AND more fuel. Both are indispensable, and agriculture can contribute to both goals. You are entirely correct that we need to search for new solutions. With regard to biofuels, there are opportunities in several areas. Much of the world still practices traditional agriculture, so higher prices for commodities offer an historic opportunity to modernize farming. The potential increases in yields are very significant. In addition, the United States continues to increase yields through technology, especially through genetic research that allows us to increase yield per acre, increase the energy yield per unit of volume, increase drought tolerance, and reduce the intensity of fertilizer, herbicide, and pesticide usage. Finally, over the next several years we anticipate the commercialization of cellulosic ethanol, which will allow large scale ethanol production from non-food plants.
Moderator: The Under Secretary continues to review your questions. Thank you for your patience.
A [Thomas Dorr]: I would like to respond to Harish's comment above.
Increasing energy efficiency is an important objective, and the U.S. is working very hard in this area. In the long run however, given the growth in population and the very rapid economic development being achieved by an increasing number of emerging nations, the solution to the global energy crisis is to produce more energy. As I’ve noted earlier, we have many options. We cannot say with certainty at this time which of them will emerge as the most cost-effective next-generation fuel, but we can approach this question with confidence that free markets can and will find solutions. This is an historic opportunity for researchers, investors, and innovators.
Comment [Sailor2]: I would say it is unfair to consider India and China to be the factor behind the spiraling prices of Food and Fuel. Per Capita Consumption of Grains for India is 178 KG Vs 1046 Kg for a US citizen. Per capita grain consumption has increased in the US. In 2003, US per capita grain consumption was 946 kg per year which increased to 1046 kg last year, whereas India’s per capita grain consumption has remained static over the same period.
It’s not just grains. Milk consumption, in fluid form, is 78 kg per year for each person in the US, compared to 36 kg in India and 11 kg in China. Vegetable oils consumption per person is 41 kg per year in US, while Indians are making do with just 11 kg per year.
Hence I would like to disagree with your reason for attributing growing prosperity in India and China as a factor for increasing food prices.
A [Thomas Dorr: I am not at all intending to blame anyone. On the contrary, I applaud the growth that is taking place in India and other developing countries around the world. Accordingly, it is important to acknowledge that growth is occurring. I do not assume the global economic pie is stagnant. In fact, India has shown immeasurable success in recent years. Growth continues in the United States, Europe, Japan, and China as well. The point is simply that we have to identify cost-effective new resources. We assume that India’s growth will continue as has ours, and it should.
It is clear that after 25 years of flat to declining commodity prices (including energy) a structural revaluation must and is taking place. Without this revaluation there would be no market incentives to increase production.
These significant price increases create extraordinary opportunities for subsistence farmers to participate in this economic growth. It is important that governments don’t impede these opportunities.
Q [Chat Participant]: How do new energy megaconsumers China India affect this food-fuel debate?
A [Thomas Dorr]: They obviously add new demand. This increases prices and should create opportunities for producers and entrepreneurs.
Q [ZAKIR]: Both food and fuel crises r the main problem of the world. Pakistan is also facing these two main issues along with electricity.
So I would like to hear from you about the purpose, results and benefits and what disadvantages and effects on the other country will be by this trade. Sorry for mis-wording.
thank you,
hafiz m zakir
A [Thomas Dorr]: We recognize that the circumstances of countries can vary. Three months ago, 130 countries gathered in Washington for the Washington International Renewable Energy Conference at which time there was broad support for rapid deployment of renewable energy opportunities. There was also a broad recognition of these represent a historic opportunity for agriculture producers and rural communities. For these to be effective, appropriate governance and market structures need be in place. It would not be appropriate for the United States to dictate to Pakistan or any other nation what their specific policies should be, but we stand ready to share the technology and support necessary to enhance this development.
Q [Kuba]: second question: How do respond to concept of food industry waste-oil as a fuel for vehicles? In my opinion this would be a full-circle approach: Food is still generated...but then waste is used as fuel...and byproducts of this fuel do not pollute.
A [Thomas Dorr]: We concur. The volumes are sometimes small.
Moderator: For more information on the WIREC conference, read the following article at America.gov: "Renewable Energy Meeting Draws Policymakers, Business Partners" http://www.america.gov/st/env-english/2008/February/20080229174650mlenuhret0.3410913.html
In addition, please see our recent webchat transcript: Advancing Renewable Energy: After WIREC -- Next Steps http://www.america.gov/st/texttrans-english/2008/May/20080529075841xjsnommis0.7742884.html
Thomas Dorr: On behalf of the United States Department of Agriculture, thanks for allowing us to participate in this discussion. I want to encourage people to look at these challenges as opportunities. We have experienced these sorts of issues in the past, and when we allow ourselves to depend on individual entrepreneurship and ingenuity, it is amazing how much we gain. Thank you. Thomas C. Dorr
Moderator: We wish to thank Under Secretary Thomas Dorr for joining us today. The webchat is now closed.
A full transcript of today's webchat will be published (usually within one business day) to our Ask America homepage at http://www.america.gov/multimedia/askamerica.html.
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