It 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 entire report has not been released to the public. The Guardian speculates that it has been withheld to prevent embarrassing President Bush. The World Bank has not been completely silent on the matter; they did release another report and a letter to the leaders that will attend this week's G-8 Summit in Japan urging a global effort to end the food crisis. World Bank Group President Robert Zoellick said:
What we are witnessing is not a natural disaster - a silent tsunami or a perfect storm. It is a man-made catastrophe, and as such must be fixed by people.Zoellick called for increased oil production and energy efficiency, as well as world leaders to step up on food aid to struggling countries. While the cost of food and fuel prices will be at the forefront of the agenda (although the main topic as set by Japan is global warming) for the G-8, few people are hopeful for a breakthrough. The L.A. Times lamented:
Part of the G-8's weakness is that the members are themselves struggling economically. The United States is showing little or no growth, joblessness is rising and stock markets are falling. Japan and most of the other G-8 members aren't faring much better.Finally this week CBS News reported on the continued effect of high fuel and corn prices on Americans. In this video they looked at US Dairy farmers, and the new issues they are facing:
Further Reading:
Reuters on the World Bank and the G-8
The Forgotten Flaw in Biofuels Policy by Harry de Gorter and David R. Just
The Washington Post on the Food Crisis
Time on the Food Price Crisis
