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June 08, 2008

FAO meeting sends food security to top of international agenda

World leaders meeting to discuss soaring food prices appeared set to drop calls for more controls on biofuels in a final declaration to win agreement on a plan to halve the number of hungry people by 2015.

The last draft of the statement by delegates from more than 180 nations at the UN- sponsored Food Security Summit in Rome dropped references to setting international guidelines on the production of biofuels, instead calling for more study. The debate on biofuels has centered on whether their use drives up food prices by using land that would otherwise produce crops.

``It was clear before the summit that we were unlikely to see any significant shift in biofuels policy in Europe or the U.S.,'' said a senior analyst at Lehman Brothers in London. ``I would have been surprised if there had been any highly condemnatory wording in the document.''

Debate over biofuels was the focus of the most discord at the three-day meeting being held to discuss how to ensure that the highest commodity prices in three decades don't further swell the ranks of the world's 860 million hungry people. The U.S. and the European Union have pledged to expand biofuel production to combat global warming and reduce dependence on fossil fuels.

``It is essential to address the challenges and opportunities posed by biofuels, in view of the world's food security, energy and sustainable development needs,'' the draft said. It also said that biofuel use must be sustainable and take into account the need to achieve global food security.

The diversion of land to the cultivation of crops for ethanol production has contributed about 30 percent of the rise in food prices, the Washington-based International Food Policy Research has said. The U.S. has put the figure at less than 3 percent.

``Throwing billions of dollars at biofuels and setting targets that cannot be reached in a sustainable way ignores the obvious impact these policies are having,'' Barbara Stocking, the director of Oxfam UK, said in a statement.

The portion of the U.S. corn crop devoted to grain-derived ethanol will rise to 33 percent from 23 percent last year, according to the U.S. Department of Agriculture. Most of the crop is used for animal feed.

The U.S., the world's biggest producer of ethanol from corn, and Brazil, the top maker of the fuel from sugar cane, have skirmished at the meeting over the issue. The two countries produce more than 80 percent of the world's biofuels, according to the United Nations Food and Agriculture Organization.

Brazilian President Luiz Inacio Lula da Silva said in his opening address on June 3 that ethanol from sugar cane gives off 8.3 times more energy than is needed to produce it, while for corn, the ratio is 1.5 times.

A 60 percent increase in food prices since the beginning of 2007 has sparked riots in more than 30 countries that depend on imported food. The wealthiest nations pledged $6.3 billion in emergency aid last year, yet critics say that will do little unless accompanied by policies that promote greater output.

The draft declaration also called for countries to slash trade barriers and help give farmers in developing nations a chance to sell their products on world markets.

The meeting succeeded in raising the food-price issue to the top of the international agenda before the meeting of the Group of Eight industrialized nations next month in Japan, said Lennart Bage, the president of the International Fund for Agricultural Development.

``This conference has recognized that what is needed is not just a quick fix for today,'' he told reporters. ``In order to avoid food price rises in the future, we need to invest longer term in agriculture.''

FAO Director General Jacques Diouf has said the world needs to invest $30 billion a year to boost agricultural production and fight hunger worldwide. Food output per person in Africa has fallen for the past 30 years, and agriculture productivity is a quarter of the world average, according to the UN.

Last year, with food prices surging, development aid from donors such as the U.S., the European Union, Japan, Switzerland and Canada dropped 8.4 percent in real terms to $103.7 billion.

``Hunger is on the march now,'' World Food Programme Executive Director Josette Sheeran said. ``This really is not acceptable in a world where we know how to produce food.''

Bloomberg

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