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Wednesday, 5 September 2012

Food crisis to see the back of biofuels?

Source: businessinsider.com
With prices of corn, wheat, soybean and other staples steadily rising, all three United Nations food agencies have this week issued a joint appeal calling for prompt action to avert a major global food crisis.

The heads of the World Food Program (WFP), Food and Agriculture Organisation (FAO) and International Fund for Agriculture Development warned in a statement that the sharp rise in food prices in recent months threatens to make life even more difficult for tens of millions of people in both less developed and Western countries.

They called for less developed countries to “expand assistance for small-scale farmers and food aid to mothers and children, promote sustainable food production through better investment and adjust biofuel production requirements”.

Going above and beyond the UN’s call for “adjusting biofuel production requirements”, Nestlé, the world's largest food company, chimed in by calling on the US and EU to scrap their biofuel targets altogether because of the price rises and food shortages to follow.  Speaking at World Water Week conference in Sweden, Paul Bulcke, Nestlé chief executive, was pretty frank in his assessment. “We say no food for fuel.  Agricultural food-based biofuel is an aberration,” he said.

The food vs fuel debate looks set to continue as this crisis unfolds, but the greater aberration is arguably the commodities bubble that threatens to drive food prices even higher as financial speculators cash in on the crisis.  With crop failures and drought taking their toll on supermarket prices, can we really afford to allow Glencore and friends to “make a killing” (in more ways than one)?

Blog by Neil Bradley

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