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General News    H2'ed 7/6/08

Biofuels Cause 75% Increase in Food Prices

By The Telegraph  Posted by (about the submitter)       (Page 1 of 2 pages)   17 comments
Environmental campaigners have called for a change in policy on biofuels after a report that they have caused a 75 per cent increase in food prices.

An unpublished World Bank study claimed the EU and US drive towards biofuels was having a massive impact on both food supply and prices.

The US Government had claimed that biofuels - mainly ethanol produced from crops such as corn, palm and soya - was responsible for only a three per cent rise in food prices.

President Bush had linked higher food prices to a bigger demand by wealthier consumers in China and India.

But the World Bank report, drawn up by an internationally-respected economist, states unequivocally that income growth in developing countries was not a major factor in price rises and that a shortage of grain caused by droughts had had only a marginal impact.

"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," the report states.

"The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertiliser prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period."

The report was drawn up in April but has remained unpublished prompting speculation that it had not been released to save President Bush from embarrassment.

Biofuels have been seen as an environmentally less-damaging alternative to petrol and diesel which would help combat global CO2 emissions and help reduce dependence on oil.

But there has been growing criticism that the growing of crops for biofuels causes more harm than good because of the amount of land and energy needed to grow them in sufficient quantities.

Conservationists say the growing demand has led to swatches of vitally important rainforests being cleared for crops. And the switch by farmers from growing food crops to the more lucrative biofuel crops had led to food shortages and higher prices.

According to the World Bank rising food prices have pushed 100m people worldwide below the poverty line and have sparked riots from Bangladesh to Egypt. Government ministers in the UK have described higher food and fuel prices as "the first real economic crisis of globalisation".

The EU has a target of ensuring 10% of petrol and diesel comes from renewable sources by 2020 and since April, all petrol and diesel in Britain has had to include 2.5% from biofuels. But because of concerns about the sustainability of biofuel crops the target is now under review.

On Monday, MEPs will vote in the EU Parliament's Environment Committee on proposed amendments to the Renewable Energy Directive, including an amendment to scrap the 10 per cent target.

In the UK the Government commissioned a review of the impact of biofuels on land and food policy led by Professor Ed Gallagher which is likely to be published shortly. It is thought to conclude that biofuels are driving global food prices up and are causing food shortages and global hunger.

The high-profile international issue is due to be discussed by the powerful G8 group of industrialised countries when they meet in Japan next week.

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