$400 crabs, biofuels and food riots

Rising food prices around the world has pushed about a hundred million people below the poverty line, estimates the World Bank. Some governments have likened the current shortage of food to needy countries to spark the "the first real economic crisis of globalization". There have been recent reports that some countries have been hoarding food. Food riots have broken out in Egypt, Indonesia, Cameroon, Peru and, most recently, Haiti.

Around the beginning of May, the explanations doing the rounds towards understanding the world food shortage was that the spike in food prices worldwide is primarily a consequence of rising demand from China and India: In the words of the President of the United States: “when you start getting wealth, you start demanding better nutrition and better food, and so demand is high, and that causes the price to go up.”

How about the effect contributed to this phenomenon due to the growing of food to make fuels - the whole biofuels thing? Well, it was widely propagated at about the same time that the contribution to the increase in world food prices due to the effects of siphoning off food to make biofuels was no more than 2-3%.

While agreeing that sustainability and innovation are needed, U.S. Agriculture Secretary Ed Schafer insisted that biofuels contribute only 2 or 3 percent to a predicted 43 percent rise in prices this year. "The use of sustainable biofuels can increase energy security, foster economic development especially in rural areas, and reduce greenhouse gas emissions without weighing heavily on food prices," Schafer said. Last month, the U.S. Congress enacted a farm bill which reduced a tax credit for refiners by about 10 percent per gallon. The credit supports the blending of fuel with the corn-based additive.

Not so fast...

The Guardian has published a new report that conclusively states that biofuels have forced global food prices up by 75%... Yes, 75%...

Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian. "Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," says the report. The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertilizer prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.

Meanwhile the lives of excess goes off well... Here is an example of 400 dollar crabs.

Blackstone's deal maker Stephen Schwarzman eats three-course meals within 15 minutes, the chef says. Mr. Zeugin says he often spends $3,000 for a weekend of food for Mr. Schwarzman and his wife, including stone crabs that cost $400, or $40 per claw. (Mr. Schwarzman says he had no idea how much the crabs cost.)

In other interesting news, the G8 leaders of the free world are meeting in Tokyo as we write this to talk about global food shortages and ways to increase (double) world food production. Not to be outdone, they dined on 19 separate dishes including diced fatty flesh of tuna fish and milk-fed lamb with aromatic herbs. Today, as they continue 'talking', the leaders will enjoy a $400 dinner of giant crab, $100-a-kilogram langoustine and sweet clover ice cream, prepared by Michel Bras, a Michelin three-star French chef.