UN: biofuels not to blame for high food prices

One of the many myths profilating in the media claims that the rise in biofuel production is responsible for increased food prices. It is very difficult to debunk such popular myths once they are spread, but nonetheless the world's leading food and agriculture analysts do their best to analyse and if necessary debunk them.

According to Achim Steiner, executive director of the United Nations Environment Program (UNEP) and Under-Secretary General of the United Nations, the linkage is mere speculation and it is even unlikely that biofuels play a role. Far more important factors are bad harvests in the major food producing regions, violent weather conditions induced by climate change, and rapidly growing demand from China. The UNEP chief said some people were getting 'single-minded' about biofuels and fail to see the complexitities of the world's agricultural markets.

While further study is needed to understand the impact of biofuels on crop markets, Steiner said it is unlikely that environmentally friendly biofuel crops are responsible for price increases of tortilla flour in Mexico or of pasta in Italy. But some journalists and those with an anti-biofuel agenda have quickly tried to make a link between these phenomena.

Global price fluctuations in the grain markets have always existed, although we are for some, like wheat, at historic highs at the moment. It would be somewhat premature to say that pasta costs more because there is biofuel grown in other parts of the world. There are speculative assumptions at the moment. We are working together with our colleagues in different institutions to assess whether that linkage can really be made. - Achim Steiner, executive director of the United Nations Environment Program

Steiner spoke on the sidelines of a two-day national conference on climate change in Italy held at the Rome-based U.N. Food and Agriculture Organization (FAO).

We should ask ourselves: are we getting single-minded about the biofuels issue instead of looking at the full spectrum of issues? - Achim Steiner, executive director of the United Nations Environment Program

On the other hand, increasingly violent weather does pose a real danger to crops and to food supplies, particularly for the world's poorest. This much greater threat to supply and price stability of food and agricultural products comes from climate change and the expected increase in floods, droughts and other crop-damaging weather. Biofuels, which reduce carbon dioxide emissions and reduce global warming, precisely offer an opportunity to mitigate this threat:
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It is clear that we will face a greater risk of variations in supply, which in turn will create much more price volatility, and that is a difficult consequence particularly for the poorest economies in the world, Steiner said.

Steiner also noted that farmers, particularly in the United States, are capable of increasing production to respond to a rise in demand.

While voicing his caution on the link to prices, Steiner echoed widespread concerns that, if left unregulated, the push to plant new biofuel crops could hurt the environment.

Regions like Europe, where the EU has pledged to replace 10 percent of transport fuel with biofuels by 2020, must ensure that imported biofuels are not grown by cutting down tropical rain forests or damaging other sensitive areas, Steiner said.

"Like with other products, there are sustainability criteria and the world is struggling at the moment to agree on those," he said.

One thing remains clear: the public at large needs to be better informed about the complexities and opportunities of the biofuels sector.

References:
Forbes: UN Skeptical of Biofuel Price Hikes - September 13, 2007.