Biofuels promotion increases food prices

biofuel pump in field

June 2011 - Previous reports have highlighted the link between the promotion of biofuels and food prices, but this one stands out for the institutional heft.


The authors of this report addressed to the Ministers of Agriculture of G20 add that “Failing an outright removal, governments should at least develop contingency plans to shelve support schemes temporarily at times when food prices are high and supplies are scarce”. However, prices are rising for several years if there is no radical change of economic paradigm! Food prices could double in the next 20 years!


The report, commissioned by ministers of the G20 comes as the European Commission must rule on the ILUC[*] factor and it has launched a call for tenders to study the impact of agrofuels on this ILUC factor and on food price, according to the Renewable Energy Directive (Article 17.7 and Article 23 of Directive 2009/28/EC).


According to the report, biofuels have consumed 20 percent of the crop of sugarcane on average between 2007 and 2009, and 9 percent of oilseeds. The Global Subsidies Initiative, a non-profit group, estimated that total annual subsidies to producers of ethanol and biodiesel by the 27 EU Member States in 2008 was more than 3 billion euros


[*] ILUC (Indirect Land Use Change) factor appears when crops for agrofuels displace some previous activities on other places (land for agriculture or forest).

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