Pressure builds on biofuels over impact on food supplies
30 April, 2008
Biofuel policies have come under further attack for allegedly reducing supplies of crops and raising food prices, as the prospects of international trade conflict increased.
On Monday, the United Nations (UN) secretary general Ban Ki-moon said that he would lead "a high-powered task-force" to co-ordinate the organisation's efforts to address "the global crisis arising from the surge in food prices".
Meanwhile, the UN's special rapporteur on the right to food this week accused the US and the European Union (EU) of having taken a “criminal path” by contributing to an explosive rise in global food prices through using food crops to produce biofuels.
Speaking in Geneva, Jean Ziegler said that the fuel policies of the US and the EU were one of the main causes of the worldwide food crisis. Noting that last year the US used a third of its maize (corn) crop for biofuels and that the EU plans to replace 10% of its transportation fuels by biofuels by 2020, Ziegler has called for a five-year moratorium on the production of biofuels. Other critics of biofuels have also called for a moratorium.
Ziegler blamed market speculation for 30% of the increase in food prices. Companies such as Cargill, which controls a quarter of all cereal production, have huge market power, he said, while hedge funds are making huge profits. He called for new financial regulations to prevent such speculation.
Meanwhile, in a move likely to anger the US, the EU's trade chief, Peter Mandelson, blamed US domestic subsidies for production of ethanol from maize for pushing up global food prices.
"We can already see that large-scale biofuel production, especially in the US, may be one of the factors pushing up food prices as it diverts resources from food production," EU trade commissioner Peter Mandelson wrote in the UK newspaper The Guardian yesterday. "The race to grow maize for ethanol subsidies in the US reduces the supply of food crops on world markets and drives up the cost of this important staple. European biofuel production is having only a minimal effect on global prices, but we will have to track this closely."
However, he backed biofuels in general: "The issue is not biofuels or no biofuels, but the right biofuels."
He added: "Biofuels must be an environmental policy in pursuit of an environmental outcome - the most sustainable policy is the only right policy. That is the basis of the European Commission's January proposals."
He said that the EU should import biofuels if those were more sustainable than those produced in the EU. "A basic sustainability test means that there should also be no question of the developed world favouring its domestic producers and home-grown crops at the expense of our environmental objectives," he said. "If we can import from the tropics cheaper, cleaner biofuels that meet clear sustainability criteria, we should."
He rejected suggestions that the EU's biofuel sustainability criteria should cover social issues such as labour rights and land rights. "It is worth asking if social conditions tied to biofuel exports make sense. Why should we suggest there is an obligation on producers who export sugar cane biofuel, but not on those who export plain sugar cane?"
The criteria should instead focus on certification to reduce greenhouse gas emissions, said Mandelson.
The UN Task-Force on the Global Food Crisis will comprise heads of UN agencies, funds and programmes and the Bretton Woods institutions the World Bank and the International Monetary Fund and international authorities. It is expected to meet in the first week in May.
As a first measure, the UN's Chief Executive Board (CEB), which met in Bern in Switzerland, called for the urgent provision of $755m of emergency funding for the UN to feed millions of hungry people worldwide.
The UN's Food and Agriculture Organisation (FAO) has proposed an emergency plan to provide poor countries with seeds and inputs to boost production and called for $1.7bn in funding. The UN's International Fund for Agricultural Development is providing an extra $200m to poor farmers in the worst-affected countries.
Ban said that escalating energy prices, lack of investment in agriculture, increasing demand, trade distortion subsidies and recurrent bad weather were some of the reasons for the recent surge in food prices.
