Biofuels push up beer prices
Posted by Brian[T]he price of barley, which is used to make malt, an essential ingredient in brewing, has doubled in the space of a year from 200 to 400 euros per tonne on the German market.
The march of biofuels is inexorable. Of the 12 million hectares farmed in Germany, two million are already being used for plants which can be turned into biofuel.
“Biofuels are monopolising the land,” said Manfred Weizbauer, the head of the German millers’ federation, which is calling for a cut in the subsidies granted to biofuel crops.
The impact of the biofuels is not restricted to beer, with the price of bread likely to rise by 10 percent as a result of reduced grain production, the German bakers’ federation has warned.
The biofuels policy is encouraged by the European Union, which wants vehicle fuel to contain at least 10 percent of the ‘green’ fuel by 2020.
The signs are becoming increasingly clear - biofuels are the wrong way to power our cars. We have a finite supply of arable land in this world. Production on this limited space is being transferred from food crops to crops earmarked for biofuels. It doesn’t take an economist to predict what happens next. Less supply of food, same (if not greater) demand - prices go up.
The decision by various governments to force the market’s hand via heavy subsidization will become a readily apparent folly within a decade. I can envision the news reports now decrying how the poor can’t afford to eat because the price of staples, like corn used for tortillas, has increased so sharply as a result of increased demand for biofuels. I’m sure the left will propose a government takeover of food production because “clearly the free market doesn’t work.” Never mind the fact that the government meddling in the free market will cause the dramatic price inflation of food crops.
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April 23rd, 2007 at 9:18 pm
oh.my.god…. stop producing biofuels NOW! Good beer costs enough as it is!
April 23rd, 2007 at 9:35 pm
Maybe we’ll finally invent a way to run our cars on beer once the oil runs out.
April 24th, 2007 at 3:50 pm
[...] Flashpoint notes that Biofuels are raising the price of beer… [...]