Biofuel Production Caused Most of Food Price Hikes

Biofuel supporters claim it is a "greener" alternative to fossil fuels, cutting greenhouse gas emissions. Others have said it was mainly promoted to enrich agriculture.

A draft World Bank report reveals that growing crops for biofuels, along with diminished grain supplies, market speculation and export bans, have been responsible for three quarters of the 140 percent rise in food prices over the last six years.

The report’s author, World Bank top agricultural economist Don Mitchell, said the remainder of the increase has been due to a weak U.S. dollar, higher fertilizer costs and soaring energy fees.

The report contradicts earlier estimates of biofuel’s effects on food prices that have ranged between 2 and 3 percent claimed by the Bush administration and up to 30 percent calculated by the U.N. Food and Agricultural Organization.

“Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate,” Mitchell said.

Several government ministers reportedly have told the International Monetary Fund that the food shortages resulting from the increased production of biofuels is causing a “crisis of humanity.”

Photo: Chad Reischl - iStockphoto
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