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LONDON: Biofuels have caused world food prices to increase by 75
percent, according to the findings of an unpublished World Bank
report published in The Guardian newspaper on Friday.
The daily said the report was finished in April
but was not published to avoid embarrassing the US government, which
has claimed plant-derived fuels have pushed up prices by only three
percent.
Biofuels, which supporters claim are a
“greener” alternative to using fossil fuel and cut greenhouse
gas emissions, and rising food prices will be on the agenda when
Group of Eight, or G8 leaders meet in Japan next week for their
annual summit.
The report’s author, a senior World Bank
economist, assessed that contrary to claims by US President George
W. Bush, increased demand from India and China has not been the
cause of rising food prices.
“Rapid income growth in developing countries
has not led to large increases in global grain consumption and was
not a major factor responsible for the large price increases,” the
report said.
Droughts in Australia have also not had a
significant impact, it added. Instead, European and US drives for
greater use of biofuels has had the biggest effect.
The European Union has mooted using biofuels for
up to 10 percent of all transport fuels by 2020 as part of an
increase in use of renewable energy.
All petrol and diesel in Britain has had to
include a biofuels component of at least 2.5 percent since April
this year.
“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 said.
It added that the drive for biofuels has
distorted food markets by diverting grain away from food for fuel,
encouraging farmers to set aside land for its production, and
sparked financial speculation on grains.
But Brazil’s transformation of sugar cane into
fuel has not had such a dramatic impact, the report said.
“The basket of food prices examined in the
study rose by 140 percent between 2002 and this February,” The
Guardian said.
“The report estimates that higher energy and
fertilizer prices accounted for an increase of only 15 percent,
while biofuels have been responsible for a 75 percent jump over that
period.”
-- AFP
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