As pork prices soar, Chinese put brakes on corn for ethanol

But critics around the world have recently begun to question the unconsidered effects of large-scale ethanol production, such as increasing competition for human or animal food supplies. And in China, where an estimated 30 million people died in a famine less than 50 years ago, many have reservations about using food for fuel.

As ethanol factories large and small have sprung up in China's corn producing regions in recent years, they have begun to compete with animal-feed manufacturers for raw materials.

The industrial use of corn nearly doubled between 2001 and 2005, to 23 million tons, according to a study released last December by the National Development and Reform Committee, China's chief economic planning agency. That represented 16.5 percent of the corn harvest in 2005.

The result, said the report, is a shortage of corn. "Corn supplies to the processing industry compete with supply for [animal] feed, which impacts the development of stock-breeding."

The proportion of China's corn crop used for nonfood purposes is dwarfed by the 30 percent of American corn that goes into ethanol, and Chinese ethanol production – estimated at 3.7 million tons by the Louisiana State University Agriculture Center in 2005 – was a quarter of US levels.

But "China is different," argues the FAO's Mr. Zhang. "America and Brazil have huge land areas and plenty of water," he points out. "China has shortages of water and arable land, and it is a deficit country," importing more grain than it exports.

Debate in China picking up speed

In the ongoing debate among Chinese leaders and scholars about the value of ethanol and biofuels, "more and more people think that China's potential is not so big, that China cannot use food for fuel because food security is more important than energy and because food is politically very important," Zhang says.

Such arguments convinced the government to slap new controls on the corn-processing industry late last December, suspending all investment projects still in the pipeline and insisting that all future ethanol projects should apply for approval from state planning agencies.

The continuing rise in corn prices since the beginning of this year suggests that the central government is having its usual difficulty in controlling developments in China's provinces. But the crisis has not deterred the authorities from pursuing other ethanol distilling projects and biofuel experiments.

A state-owned grain and oils conglomerate will launch a pilot project later this year to process cassava – a starchy tuber that is not considered a food in China – into ethanol. Plans are also under way to plant tens of thousands of acres of jatropha – also inedible and grown in wastelands – by the end of the decade.

One principle must rule the development of China's alternative fuel industry, the National Development and Reform Committee insists: "a guarantee that foodgrains are not the main source" of its raw materials.

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