labels: Economy - general
UN body asks countries to reconsider biofuel use of food news
24 May 2008

The UN Economic and Social Council (Ecosac) has called upon nations to halt the use of food crops to produce biofuels and help beef up supplies to confront the current food crisis.

The suggestion is among a 15-point proposals discussed at an intergovernmental debate on the soaring food prices across the world started last week.

"We are urging governments to seriously reconsider the policies to produce biofuels, so that food security is not put in danger," the plan presented by Ecosac's  president Leo Mero said.

Ecosac also called for renewed effort to conclude the Doha Round of trade negotiations, which is expected to discuss the issue of farm subsidies and tariffs in rich countries that effectively keep out developing countries from the markets.

These farm subsidies in rich countries trigger a systematic farm erosion in poor countries that causes losses of around $273 billion in 2005, it said.

The US department of agriculture, however, insist that increased demand, droughts and trade tariffs have a bigger impact on food prices.

''Ethanol production is a contributory factor to rising fuel prices, but it isn't as important as you might think,'' says the USDA.

Other factors contributing to the increase in food prices included the growth of the Asian economy, droughts in areas such as Australia, and the imposition of export tariffs by several countries, according to the USDA.

"Food-to-fuel mandates that were enacted by Congress are playing a significant role in sparking inflation in corn, which is also impacting meat, milk, eggs and many other staples," according to US grocery manufacturers association.

In fact, a research report by the US think tank International Food Policy Research Institute (See: Curbing biofuel cultivation can reduce food prices by 20 per cent: International Food Policy Research Institute)  has found that global food prices could come down by 20 per cent by next year if biofuel production is stopped completely across the world.


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UN body asks countries to reconsider biofuel use of food