World Bank report: biofuels increased food prices by 75%
July 13th, 2008 by Jim JustLast week The Guardian reported that a confidential World Bank report concluded that crop-derived fuels have been the ultimate cause of food riots, starvation and high prices around the world.
It wasn’t an anti-biofuels campaigner who arrived at that conclusion. It was Donald Mitchell, an internationally respected World Bank economist with three decades’ experience in tracking commodity markets.
The report argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.
The Guardian now has a follow-up article that contains a link to the report.