World needs to rethink
biofuels: UN food agency

ROME/MILAN—The Western world needs to rethink its rush to biofuels, which has done more harm pushing up food prices than it has good by reducing greenhouse gases, a United Nations report said on Tuesday.

The UN Food and Agriculture Organization (FAO) said policies encouraging biofuel production and use in Europe and the United States was likely to maintain pressure on food prices but have little impact on weaning car users away from oil.

"The report finds that while biofuels will offset only a modest share of fossil energy use over the next decade they will have much bigger impacts on agriculture and food security," it said in its annual State of Food and Agriculture report.

Growing demand for biofuels will boost prices of agricultural commodities in the next 10 years, the report said.

For instance, if demand for biofuel agricultural feedstock rose 30 percent by 2010 from 2007, it would drive sugar prices up by 26 percent, maize prices by 11 percent and vegetable oil prices by 6 percent, FAO said.

With global stocks low and crops strongly dependent on weather, food prices would remain volatile, it said.

Anti-hunger campaigners have blamed biofuels, which convert crops such as maize, sugar, oil seeds and palm oil into liquid fuel for use in cars, for pushing up global food prices, contributing to soaring food bills in the last two years.