World leaders deadlocked over biofuel policy

UN talks on how to tackle the global food crisis ended in deadlock last night with no agreement reached on how best to address the impact increased demand for first generation biofuels is having on food supplies.

Environmentalists had hoped that the Rome Summit would see world leaders signal their opposition to biofuels made form food crops, which a series of studies have shown are contributing to riding food shortages, deforestation and in some cases increased carbon emissions.

However, the talks ended in impasse with the senior UN officials criticising booming demand for biofuels, driven in large part by generous subsidies in the US and Europe, while large biofuel producers such as the US and Brazil maintained that the growing market was not responsible for rising food prices.

Consequently, the summit's draft declaration referred vaguely to "the challenges and opportunities posed by biofuels" and only committed to further " in-depth studies" designed to ensure biofuel production is sustainable.

The fudged declaration prompted American agriculture secretary Ed Schafer to declare that increasing production of corn ethanol represented the "right policy direction".

Earlier in the week, however, director general of the UN's Food and Agriculture Organisation (FAO) Jacques Diouf had launched a stinging rebuke to US biofuel policies. "Nobody understands how 11 to 12 billion dollar a year subsidies in 2006 and protective tariff polices have had the effect of diverting 100 million tonnes of cereals from human consumption, mostly to satisfy a thirst for fuel for vehicles," he said, referring to the annual cost of US corn-ethanol subsidies.

FAO figures showed that demand from biofuels accounted for 59 per cent of the increase in global use of coarse grains and wheat and 56 per cent of the increase in vegetable oil between 2005 and 2007, suggesting that the sector had made a major contribution to soaring food prices and is propelling the expansion of agricultural land into forested areas.

Supporters of biofuels maintain that increased demand for food from emerging economies such as India and China, coupled with rising fuel prices are the primary drivers behind food price inflation. Schafer responded to Diouf's accusation by citing US figures claiming that biofuels contributed less than three per cent to the recent rises in food prices.