Biofuel production boosts food prices by 75%, report suggests
The production of biofuels has driven up food prices 75 per cent, according to an unpublished World Bank report obtained by the Guardian.
In an article published Friday, the British daily cites a confidential report authored by Don Mitchell, a senior economist at the bank. The newspaper suggests the report has not been released so as not to embarrass U.S. President George Bush, whose government had suggested biofuels accounted for a three per cent increase in food prices.
"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," the report said, according to the Guardian.
The report also said changing diets in developing countries and a drought in Australia were not significant factors in driving up the price of food — which increased 140 per cent between 2002 and February 2008, according to the report.
Instead, a large-scale push in the U.S. and the European Union (EU) to convert food crops to biofuel has tightened supplies and raised financial speculation, said the report.
Biofuels are to account for 10 per cent of petrol and diesel sold in the EU by 2020. The Canadian government in March announced plans to spend up to $1.5 billion over seven years to promote alternative fuels such as ethanol. The government also said by 2010, Canadian gasoline will consist of five per cent renewable content.
Rising food prices around the world have sparked riots and unrest as costs surge for staples including rice, milk, tortillas and bread. At a United Nations food summit in June, Secretary General Ban Ki-Moon said world food production must increase 50 per cent by 2030 to meet demand.
A Statistics Canada report released in June suggested Canadians have largely been cushioned from surging food prices. The report found prices have increased for just over 10 per cent of the food products sold in grocery stores. But as 70 per cent of food Canadians consume is produced within the country, prices for most other foods and beverages are stable or falling.