Biofuels may have fuelled global food price rise much more than thought before.
The British newspaper, The Guardian, reported on Friday that a World Bank study, kept secret so far, concluded that biofuels forced global food prices to rise by 75%, much more than the 3% claimed by the US government. In early May, US president George W. Bush had blamed the new-found affluence of middle classes in India and China for food price rises worldwide. The newspaper claimed the report had not been published to avoid embarrassing president Bush.
Perhaps this should be an issue for the G-8 leaders to discuss when they meet in Japan this week as the choices involved are tough and require coordination of a high order among different nations.
In the short run, fuel demand tends to be inelastic as transport, heating and industrial uses of fuel cannot be done away with. But equally, diversion of food for fuel means more hungry people. In the long run, more choices are available, but hunger will ensure we’re all dead. To avoid this, the right choices have to be made now.