Support for biofuels rethink grows

World Bank and IFPRI call for action on grain-based ethanol production to avert further food-price crisis

The International Food Policy Research Institute (IFPRI), the World Bank and other influential organisations have joined the growing chorus of voices calling for a rethink on grain-based biofuels in the face of rising global food prices.

In written testimony to the US Senate Committee on Homeland Security, the IFPRI warns that unless grain-based biofuel production be abolished or at least frozen at 2007 levels, malnutrition will rise in poor countries.

The IFPRI report to the Senate Committee says that a global moratorium on crop-based biofuel would bring down the price of maize by 20 per cent and wheat by eight per cent by 2010.

Even if biofuel production was merely frozen at 2007 levels, maize prices would fall by six per cent by 2010 and 14 per cent by 2015, predicts the IFPRI.

In press reports, the International Rice Research Institute said it would support a moratorium.

“If the current biofuel expansion continues, calorie availability in developing countries is expected to grow more slowly; and the number of malnourished children is projected to increase,” said Mark W Rosegrant, director of environment and production technology division at the IFPRI, in the report to the Senate Committee. “In the short run, removal of ethanol blending mandates and subsidies and ethanol import tariffs, and in the US – together with removal of policies in Europe promoting biofuels – would contribute to lower food prices.”

The IFPRI is not against biofuels, per se, and regards ethanol produced from sugarbeet and agricultural waste as beneficial.

Nor does the IFPRI blame ethanol production solely for the rise in global food prices. Other contributing factors cited in the report to the Senate include: bad weather in key production areas; higher oil prices; export bans and import subsidies; speculative trading; rapid growth in demand for meat and milk in most of the developing world; stronger economic growth in Sub-Saharan Africa since the late 1990s; rapid income growth and urbanisation in developing Asia; under-investment in agricultural research and technology and rural infrastructure, especially irrigation; and increasing pressure on land and water.

The World Bank is calling for renewed efforts to co-ordinate global food policy.

“This… should focus not only on hunger and malnutrition, access to food and its supply, but also the interconnections with energy, yields, climate change, investment, the marginalisation of women and others, and economic resiliency and growth,” says a statement from the World Bank.

The Bank has said that while biofuels should not be vilified as evil in themselves, the massive subsidies available in the US for ethanol production are distorting the market and exacerbating the food price crisis.