U.N.Says Biofuel Subsidies Raise Food Bill and Hunger

The New York Times
By ELISABETH ROSENTHAL
Published: October 7, 2008
ROME — A United Nations food agency called on Tuesday for a review of biofuel subsidies and policies, noting that they had contributed significantly to rising food prices and the hunger in poor countries.
With policies and subsidies to encourage biofuel production in place in much of the developed world, farmers often find it more profitable to plants crops for fuel than for food, a shift that has helped lead to global food shortages.
Current policies should be “urgently reviewed in order to preserve the goal of world food security, protect poor farmers, promote broad-based rural development and ensure environmental sustainability,” said a report released here on Tuesday by Jacques Diouf, the executive director of the United Nations Food and Agriculture Organization.
In releasing the report, the United Nations joined a number of environmental groups and prominent international specialists who have called for an end to — or at least an overhaul of — subsidies for biofuels, which are cleaner, plant-based fuels that can sometimes be substituted for oil and gas.
In a devastating assessment released this summer, the Organization for Economic Cooperation and Development concluded that government support of biofuel production in member countries was hugely expensive and that it “had a limited impact on reducing greenhouse gases and improving energy security.” It did have “a significant impact on world crop prices” by helping to raise them.
“National governments should cease to create new mandates for biofuels and investigate ways to phase them out,” the Organization for Economic Cooperation and Development concluded in its report. The organization includes European countries, the United States, Canada, Japan and Australia.
Still, Willy de Greef, secretary general of EuropaBio, a biotechnology industry group, said the world possessed the land and agricultural ability to produce enough food and fuel through subsidy programs.
“Of course these policies have to be developed with high quality sustainability criteria,” he said. But he added that that should include consideration of the fact that biofuels could help reduce poverty. “The development of biofuels will in fact create new revenue options for farmers all over the world, including poor farmers,” he said.
In the past eight years, as oil prices and concerns about carbon emissions have increased, a number of countries, including the United States, and the European Union have put into place subsidies and incentives to energize the fledgling biofuel industry.
As a result, the production of biofuels made from crops that could also be used for food increased more than threefold from 2000 to 2007, the Food and Agriculture Organization said. Support to encourage biofuel production in Organization for Economic Cooperation and Development countries amounted to more than $10 billion in 2006, the organization said.
But a host of studies in the past year concluded that the rush to biofuels had some disastrous, if unintended, consequences for food security and the environment. Less food is available to eat in poor countries, global grain prices have skyrocketed and precious forests have been lost as farmers have created fields to join the biofuel boom, the studies said.
Worse still, specialists say, so much energy is required to convert many plants into fuel that the process does not result in a savings of carbon emissions. The O.E.C.D.’s report said only two food-based fuels were clearly environmentally better than fossil fuels when considering the entire “life cycle” of their production: used cooking oil and sugar cane from Brazil. Sugar cane is far easier to convert to biofuel than most other crops.
Already this year, the European Union has stepped back from its target of having 10 percent of Europe’s fuel for transportation come from biofuel or other renewable fuels by 2020.
Last month, the European Parliament suggested that only 5 percent come from renewable sources by 2015, and that 20 percent come from new alternatives “that do not compete with food production.”
Mr. Diouf of the Food and Agriculture Organization stopped short on Tuesday of suggesting that the world end biofuel subsidies. Rather, he said they should be revised to direct the benefits to developing nations.