Wednesday, June 25, 2008

The effect of Soaring Fossil Fuel on the price of agricultural produce


Price hikes in agricultural produce is relatively caused by the soaring fuel price. Farmers have to pay more for the same amount of fuel which they used in tractors and other farming machines. In addition, synthetic fertilizer is made of by products of crude oil.

In countries like the United States, million tons of corn and soy bean are used as raw material for making bio-diesel. This kind of practice reduces the amount of those food material in the world market. High price and inavailability of food in the market mean more starvings. This situation is very dangerous. People launched massive street protest against their government. They blame the government for not being able to stabilise food price.

In certain cases, the soaring food price is considered positive by traditional farmers who do not use tractors or machines. I saw this case in Sonder, and other Minahasan villages in North Sulawesi. They do not use tractors to plow their field. Instead they use cow. They also use organic fertilizer made of manure. Farmers get higher profit from higher agricultural produce. Unfortunately, such situation cannot be used as an excuse to the the food price keeps going up. The price of food has to be within the reach of customers.

We cannot blame the government alone for this crisis. Bio-fuel industries should take the responsibility for this problem. Actually they have to use raw material other than food commodity so that their business will run without causing food scarcity in the market. Experts recommend algae, grass, jatropha curcas and other plants as base material for making bio-diesel and bio-ethanol. These plants will not always effective as some plants can only grow in tropical regions. To solve this problem, bio-fuel industry can still use food base material such as coconut, sawit palm, cassava or soy bean, and corn but they must grow new plantations. They must not convert the available plantations, which had previously been dedicated to supplying food to the market, to bio-fuel production.

Bio-fuel importers in Europe and the North America must set standards which can be used to prevent the conversion of food farmland into bio-fuel plantation.