Biofuels debate at FAO summit set to intensify

04 June 2008 13:08  [Source: ICIS news]

LONDON (ICIS news)--The debate on the possible contribution of biofuel production to rising global food prices at the UN Food Summit in Rome has been fierce and is expected to intensify as world leaders continue discussions on Wednesday.

An official from the UN’s Food and Agriculture Organisation (FAO) had predicted that "sparks will fly" on Wednesday.

Tuesday’s discussions proved more heated than most had anticipated, with the US in particular coming under intense criticism for its support of biofuels produced from food crops.

US subsidies and protective tariffs for its ethanol industry came under especially heavy fire.

"Nobody understands how $11-12bn/year subsidies in 2006 and protective tariff policies have had the effect of diverting 100m tonnes of cereals from human consumption, mostly to satisfy a thirst for fuel for vehicles," said Jacques Diouf, director general of FAO.

The US and Brazil, the world’s largest biofuels producers, strenuously defended their ethanol industries, which are produced from corn and sugarcane respectively.

"It offends me to see fingers pointed at biofuels, when the fingers are coated in oil and coal," said Brazilian president, Lula Inacio Lula da Silva.

US agriculture secretary, Ed Schafer, reinforced his previous claim that biofuels had accounted for just 3% of global food prices over the last year, which triggered irritated responses from other representatives.

Estimates from the International Monetary Fund (IMF) hold biofuels accountable for 20-30% of the price increases.

The three-day summit was called to address the global food crisis. On Tuesday UN Secretary General, Ban Ki-moon called on world leaders to take "bold and urgent" steps to tackle food shortages.

He said that over 850m people worldwide were undernourished prior to the current crisis, adding this was estimated to have risen by 100m since then.

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By: Charles Shaw
+44 20 8652 3214

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