Groundnuts and Ethanol

It is one of the curious facts of life that government interventions in agriculture very rarely do what they say they want to do 'on the tin'. In a curious way, this has been shown up by the success of the EU's stated aim of food security under the Common Agricultural Policy.

As a way of maintaining the environment, the CAP was not the best. As a way of benefiting small farmers in continental Europe and Ireland--but not in Britain, because of the attitudes of successive governments--it was not as good as direct subsidy.

Yet as a way of guaranteeing the food security of Europe (originally a slightly but not wholly specious excuse) it has proved useful when it did not need to be, until now, when it may actually do some good. We are in for food, water and oil problems globally, and indeed some countries have been experiencing them for some time.

I thought of some of the criticisms of the CAP, and even more of its disastrous, fish stock-destroying, community-ripping, greed-driven parallel, the Common Fisheries Policy, yesterday when I was giving a talk about London and Britain in the nineteen forties. It struck me that the vast 'groundnut fiasco' which commenced from 1946 and which reached its apogee in 1949-50 was a comfortable fit for many of the follies of biofuel programmes.

Biofuel, typically ethanol production from agricultural land but also associated with the development of switchgrass and bioreactors, is actually quite wasteful. It takes up ground which could be used for food. The production process consumes huge amounts of water, and the suspicion which must play about the mind is that it is only being produced because it represents a kind of playtime version of oil.

Yet one barrel of biofuel represents a small percentage of the energy of hydrocarbons, and effectively displaces pollution and energy demands to production from use. It is a fundamentally false product in that regard, conveying the idea of virtue for the user whilst in fact actually being vicious for society.

Biofuels have been promoted by governments and international organisations all over the world. I wrote a piece on this blog before the Iowa caucuses about how political calculation has played its part in all of this, but I note that across the western hemisphere governments are encouraging what must be an obvious disaster, in terms of the loss of food land and the inadequacy of the product. Why?

Well, because it seems like a good idea at the time, and also because farm lobbies like it. As I wrote, the whole thing reminds me of the groundnut scheme from sixty years ago. There, the British government--not quite post-Imperial, despite its pretensions--decided to intervene in East Africa.

Under cover of improving the agricultural lives of the native peoples, the British recruited a large 'groundnut army'. Their scheme was to sow the soil with peanuts. These peanuts would then be harvested so that a huge and near-free amount of vegetable oils could be garnered. These oils could be used in cooking, and in some types of machinery as lubricants. I suspect that latter use would have been a disastrous mistake but it speaks to the blithe disregard of science by decision makers.

The problems were many. Nobody really understood the ecology of east Africa, to start with, or at least no one who understood the ecology of Tanganyika, where the scheme was based, was listened to. The trees and vegetation at the site had to be cleared with tanks and the chains of shipping anchors. Flash-floods and sun baked soil made growing and harvesting the peanuts a nightmarish activity; and disease and the lack of local foods sufficient to feed an army of agricultural labourers holed the project below the waterline.

Eventually, the British government lost some £49 million pounds. In modern terms, this is around 2.9 billion pounds. I have arrived at this figure, economics being what it is, by multiplying by 58.36. This, as any reader of 'calculate modern values of historic concertina prices' knows, is an agreed inflator. Here is an 89 page document on the velocity of early modern money which in part measures the economy in terms of the price of London bricks since the thirteenth century.

Economists have embraced biofuel schemes. That's all I'll write after the above paragraph on that.

Regardless, £49 million was a lot of money in 1949. This money would have been vital to maintaining the British economy within the Bretton woods system, and therefore British food supplies, investments, and military independence before Suez. It could have been used to stabilise the sterling area, or to ease a transition to a currency float should the British have wished for the option.

Instead, it was lost. The British lost their grip on East Africa, and therefore on the eastern part of the Indian Ocean. They lost all credibility in terms of large imperial projects. And everybody swore that the lessons would be learned and that no one would get involved in such silly schemes again.

Here is a link to a speech about biofuels and farming made some time ago by a man described by the great Robert Marshall Andrews of Gray's Inn as a 'pillock on a gap year'. He is currently Her Britannic Majesty's Principal Secretary of State for Foreign and Commonwealth Affairs. Below is a video of a sock-puppet who convinces himself that he can save the world, and who ends up rooting in the rubbish bins after a disastrous flight.