by Renée Sams
THE RAPID expansion of cultivation of plants for the production of biofuel has forced up global fuel prices by as much as 75 per cent. This startling fact was revealed in a leaked World Bank report, completed in April, that was not published, it is believed, to avoid embarrassing President George Bush.
It came at a critical point in the international negotiations on biofuel policy about to be discussed at the G8 summit in Hokkaido, Japan, where the world food crisis was high on the agenda.
The hypocritical leaders of the world’s most powerful countries, however, ignoring intensive lobbying by environmental organisations and the large demonstrations where several protesters were arrested, failed to take any action to prevent or even slow down the production of biofuel from agricultural land.
They made a lot out of their unity in their commitment to the reduction of carbon dioxide but actually meeting their targets did not seem to be a priority.
The secret report reveals the impact that the drive for biofuel has had on rising food prices that have already pushed 100 million people below the poverty line.
This contradicts the US claim that plant-derived fuels contribute less than three per cent to food price rises.
Robert Bailey, policy adviser at Oxfam said, “Political leaders seem intent on suppressing and ignoring the strong evidence that biofuel are a major factor in recent food price rises.”
President Bush linked higher food prices to higher demand from India and China but the World Bank report disputes that saying that: “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 basket of food prices examined in the study rose by 140 per cent between 2002 and February 2008 and it was estimated that higher energy and fertiliser prices accounted for an increaser of only15 per cent. But biofuels have been responsible for the 75 per cent rise over that period.
Don Mitchell, author of the report and a senior economist at the World Bank, has done a detailed month-by-month analysis of the surge in food prices, revealing a much closer link between biofuel and food prices.
He argues that the production of biofuel has distorted food markets in three main ways. First, it has diverted grain away from food to fuel, with over a third of US corn now used to produce ethanol, and about half of vegetable oils in the EU going towards the production of biodiesel.
Second, farmers have been encouraged to set aside land for biofuel production. And third, it has sparked off financial speculation in the grain market driving prices up further.
China, which is excluded from the G8, strongly refuted the US claim that their support for biofuel is the cause of the surge in global food prices and said that the US should take the blame.
Zeng Xiao’an, from the ministry of finance said that China’s scale of corn-based biofuel was very small, only 1.3 million tons compared to the US 19.8 million tons. And he added: “The US biofuel strategy has greatly affected the global grain supply.”
China is 95 per cent self-sufficient in grain and all the corn used to make ethanol is raised by its own farmers. And Zeng pointed out the government will offer financial support for the development of biofuel from agricultural waste.
Chinese farmers have long recycled agricultural waste including crops, straw, grass, husk and animal dung, which is used to make bio-gas, an environmentally friendly fertiliser.
While China is doing all it can to improve a worsening food crisis situation, in America 24 states are offering incentives to farmers to increase their planting of biofuel crops.
And President Bush came up with another threat to the world’s climate. At a briefing at the opening of the G8 he promised; “Now is the time … to open up the Arctic National Wildlife Refuge…so that we can say to the world we will do our part in increasing (oil) supply”.