Vancouver, Canada (GLOBE-Net) - The United Nations has accused the US and the European Union of having taken the "criminal path" by contributing to an explosive rise in global food prices through using food crops to produce biofuels. This comes in the wake of skyrocketing prices and plummeting food supplies in the developing world.  But many questions remain as to whether biofuels are the root cause of the current world food crisis.

Since 2002 food prices - particularly in developing countries - have risen sharply.  In certain nations, food shortages and high prices have led to protests and in some cases rioting. There are few signs of a reprieve. The World Bank predicts prices will remain high until 2015.

Speaking in Geneva two weeks ago, Jean Ziegler, the UN "Special Rapporteur on the Right to Food," stated fuel policies of the US and the EU were one of the main causes of the worldwide food crisis. Ziegler and other environmental organizations have called for a five-year moratorium on the production of biofuels.

"Our models analysis suggests that if a moratorium on biofuels would be issued in 2008, we could expect a price decline of maize by about 20 percent and for wheat by about 10 percent in 2009-10. So it’s this significant," said Joachim von Braun, head of the International Food Policy Research Institute (IFPRI).

Currently biofuels account for less than 2% of liquid transport fuels and take up less than 1% of world agricultural land.  Biofuel produced in North America and Europe is largely corn based, and although corn has climbed in price recently, others argue escalating grain prices are the main contributor to current problems in the food supply.

Last year the US used a third of its maize (corn) crop for biofuels and has legislated to double its biofuel output by 2020.  In January 2008 the EU established a regulatory regime to replace 10% of its transportation fuels with biofuels by 2020.

In Canada the federal government recently announced plans that would require all gasoline sold in this country to contain 5% ethanol by 2010 and all diesel oil to contain 2% renewable fuels by 2012.  The government has also provided biofuel producers with subsidies of $1.5 billion or 20 cents per litre in an effort to ensure the mandate is filled with biofuel made from Canadian crops.

With such ambitious targets from so many developed nations, it’s no surprise that biofuel use has come under attack in the wake of climbing food prices.  But is it really impacting on global food prices?

"European biofuel production is having only a minimal effect on global prices, but we will have to track this closely," EU trade commissioner Peter Mandellson wrote in the UK newspaper The Guardian recently.

Brazil’s finance minister rejected the idea that the production of biofuels is driving higher the price of food globally, saying that this is a problem restricted to the United States. "It endangers (food production) in the United States, but not in Brazil, not in African countries, not in Latin American countries, which have enough land to produce both" Mantega told journalists in New York.

Other factors, such as recent droughts, low food stocks, lack of investment in agriculture, increasing demand, trade distortion subsidies and surging demand for meat and milk products in Asia, are seen to have played significantly greater roles in rising food prices.

The largest single contribution to rising food costs may be rising energy prices.  Oil has already surpassed $120 per barrel and the high cost impacts the food industry in production, processing and distribution.  Energy prices are simply driving the cost of food beyond the reach of the developing world.

The Canadian Renewable Fuels Association (CRFA) has been quick to seize on this point to counter the assertion that biofuels production is the cause of rising food prices. In a statement released last month the Association stated "Biofuels aren’t causing the food crisis – they’re part of the solution". The rationale cited by CRFA is that the great benefit of biofuels – such as grain ethanol, cellulosic ethanol and biodiesel – is that they can help fill the supply gap and create needed competition with OPEC and indeed offer the only available, accessible and affordable alternative to fossil fuels.

In a subsequent statement CRFA President Gordon Quaiattini cited an April 2008 Praxicus Public Strategies Inc. poll showing that 74% of Canadians supported the planned 5% national standard for ethanol and the 2% standard for biodiesel.  A further 67% supported increasing the national renewable fuel blend to 10% and 5% respectively.

"This poll shows that Canadians are looking to renewable fuels to fuel change across the country," said Quaiattini.  "Canadians clearly support replacing some of our fossil fuels with renewable fuels such as biodiesel and ethanol. This will pay a variety of dividends: A cleaner, greener and more affordable source of energy that will strengthen economic prospects across Canada."

There may be some logic to the notion that biofuels may be part of the energy solution by reducing dependence on fossil fuels. Certainly the production volume of ethanol is linked to the price of oil. A dramatic increase in world ethanol production has been seen since 2000, corresponding with rapid increases in the price of oil and uncertainty over the supply of fossil resources.

By implication this implies the real culprits behind rising food prices are factors such as unsustainable agricultural policies, poor land management practices, energy prices or sheer profiteering. Some commentators have noted that hundreds of millions of people in Asia have moved from poverty into the global economy over the past decade and they are eating twice a day, instead of once. Not only is this propelling rapid urbanization, it is increasing the demand for food staples and once unthinkable luxuries like meat, which in turn is pushing up prices.

One significant assessment of the food versus fuel issue was a 2007 OECD report ("Biofuels: Is the Cure worse than the Disease?), that was critical of current policies with respect to bio-fuels not only because they promoted the inefficient use of land, but also because of inherent limits in the amount of total road transport fuel demand that could be met from conventional ethanol and biodiesel production (i.e. 11 per cent).

An expansion beyond this scale could not be achieved, however, without significant impacts on the wider global economy, notes the report. "In theory there might be enough land available around the globe to feed an ever increasing world population and produce sufficient biomass feedstock simultaneously, but it is more likely that land-use constraints will limit the amount of new land that can be brought into production leading to a "food-versus-fuel" debate."

The report also suggested that any diversion of land from food or feed production to production of energy biomass would influence food prices as both compete for the same inputs. And because the effects on farm commodity prices can already be seen today, rapid growth in the biofuels industry likely would keep prices high at least throughout the next decade.

Some have argued that the solution is simple - switch the basic feedstock used to create biofuels to non-food crops. Many believe second generation ethanol or cellulosic ethanol produced from sugarcane, such as produced in Brazil or switchgrass, which is found throughout North America, would be a far better biofuel source than corn. An acre of sugar cane in Brazil produces about 800 gallons of ethanol, while an acre of corn produces 328 gallons.  Sugar is grown only on 2 percent of Brazil’s arable land, industry figures show.

"There are biofuels and there are biofuels, good and bad ones … waste-based and sugarcane-based can be very good," said IFPRI’s Joachim von Braun.

Most countries have avoided Brazilian ethanol because of concerns over the possible effects of ethanol production on Brazil’s fragile rainforests and other ecosystems, criticisms that Brazilian producers call absurd.

"Sugar is not growing in the forest," said Marcos Jank, president of Brazil’s biggest sugar industry group UNICA. "You don’t destroy forest to grow sugar. You actually produce a carbon credit and not a carbon deficit."

IFPRI’s Von Braun noted that there should be efforts to phase out subsidy systems for the less sustainable biofuels and focus on incentives to bring forward second generation production of both ethanol and synthetic diesel as well perhaps a "third generation" from algae and using advanced bio-technologies.

"The issue is not biofuels or no biofuels, but the right biofuels," said EU trade commissioner Mandellson.

Even the venerable World Bank cannot be definitive on the issue. A major Policy Research Working Paper "Review of Environmental, Economic and Policy Aspects of Biofuels" released in September 2007 concluded with the following statement: "Given the spectrum of agricultural and trade effects, the only conclusive statement one could make about the environmental impact of biofuels is that it is hard to generalize."

The report went on to note that there seems to be an exclusive emphasis on climate change to the detriment of other environmental problems in making the case for biofuels as an environmentally benign technology. "The reality is that the overall impact of biofuels on energy security, environment, and economic welfare is hard to conjecture."