Reference no: EM131732084

Biofuels and Food Shortages in Guatemala Biofuels were developed as an alternative to the use of oil and the dangers of its carbon footprint. Biofuels are made from corn, and the production of cars that run on biofuels has been mandated in Europe and the United States. However, there has been an unan- ticipated effect. The demand for corn has driven corn prices higher, particularly in poorer nations. For example, in Guatemala, the price of eight tortillas was one quetzal (about 15 cents USD) in 2010. Today, one quetzal will buy just three tortillas. The price of eggs has tripled because chickens feed on corn, and the cost of the feed is passed along in the price of eggs. More than prices are affected. Individual farmers are unable to grow crops because large farmers have taken over the land, and these individual farmers are found planting their crops on medians in the highways because, as they explain, “There is no other land, and I have to feed my family.”160 The same farmer’s children, ages 4 and 6, appear to be victims of chronic malnutrition. The same shortages of land and spike in food prices can be found in Asia, Africa, and Latin America. Guatemala’s experience is worse because, as one expert notes, the small Central American country is hit from demands for biofuels from both sides of the Atlantic—the United States and Europe. Meanwhile the renewable fuel standard in the United States requires increasing volumes of biofuel per year, and Europe has a 10 percent mandate of biofuels by 2020. The demand for corn will increase. The corn demand in Guatemala has resulted in 60,000 jobs, but the large number of poor are not beneficiaries of the jobs and the result is increasing poverty. Even before the biofuel demands on corn crops, the poor spent two-thirds of their income on food. With the spike in prices, their food budgets are now consuming all of their income. Pantaleon Sugar Holdings, Guatemala’s largest sugar producer has experienced annual sales growth of 30 percent. Labor unions in Guatemala have been appealing to European politicians regarding their biofuel standards because of the resulting increase in world hunger.

1. Discuss the meaning of this statement within the context of the biofuel movement and the impact on countries such as Guatemala: “Good intentions don’t always produce good results.”

2. Explain the stakeholders in the biofuels movement. Does sustainability increase poverty?