“Biofuels Behind World Food Crisis”- World Bank


Biofuels Behind World Food Price RisesPhoto:
Image by Flickr user Peter Casier

Biofuels are responsible for a 75 percent increase in world food prices according to the findings of a World Bank report published in The Guardian newspaper on Friday.

The bank said concern over climate change and increasing competition for cropland had prompted Europe and the US to encourage the use of biofuels, driving up the price of raw materials used in their production, such as wheat, soy, corn and palm oil. Notwithstanding this, a more likely explanation seems to be the rocketing price of crude oil which has shot up to almost $150 a barrel.

Almost all of the increase in global corn production from 2004 to 2007 was used for biofuel production in the U.S. while existing stocks became depleted by an increase in global consumption for other uses. This comes on top of a 181 percent increase in global wheat prices over the 36 months leading up to last February, and an 83 percent increase in overall global food prices over the same period.

The bank warned that such a global surge in food prices could push 100 million people into deeper poverty as the trend accelerates into the latter half of 2008, hitting poorest countries the hardest.

The president of the World Bank, Robert Zoellick, is calling for donor governments to raise a $500 million deficit identified by the United Nations’ World Food Program and so far about half of that target has been met. He said, “this is not just a question of short-term needs, as important as those are – this is ensuring that future generations don’t pay a price, too.”


Image by Flickr user Swamibu

The situation looks like it can only get worse as the European Union attempts to meet its target of making 10 percent of all transport fuel use by 2020 renewable – since April all petrol and diesel in the UK has had to include a biofuel component of at least 2.5 percent.

Yet there is at least some hope in the next generation of cellulose biofuel. Zoellick stated that, “there is a second stage of biofuels that is under development with cellulosic materials, and a number of people highlighted that because it may be a way of avoiding some of the energy costs but without using current food production.”

We may still be yet to see the worst results of the crisis, but the situation is yet another sign of the global economic doom forecasted for the coming months.

Sources: 1, 2

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