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The Dangers of Energy Crops

Oxfam Warns Poor Nations against Biofuels

Biofuels have pushed up world food prices and won't ease global warming, a new Oxfam report warns. Developing nations, the organization argues, should "move with extreme caution" before switching from staple food crops.

The backlash against biofuels gained momentum on Tuesday when Oxfam International, the anti-poverty group, claimed in a new report that 30 percent of the recent rise in global food prices could be traced to the shift in world agriculture toward energy crops.

The report criticized biofuel policies in Europe and the United States, and warned developing nations to "move with extreme caution" before raising lucrative biofuel crops at the expense of staple foods.

"Rich countries' demands for more biofuels in their transport fuels are causing spiralling production and food inflation," said Oxfam biofuel policy adviser Rob Bailey, the report's author, at a news conference. "Grain reserves are now at an all-time low."

The report noted that Indonesian palm oil -- used by locals as a staple cooking oil -- had spiked in price by 40 percent in 2007 because of a government set-aside. The Indonesian government has been reserving a signification fraction of its domestic palm oil -- also 40 percent -- to export for biodiesel. Indonesia and Malaysia both hope to produce even more palm oil to meet a fifth of Europe's future biodiesel demand.

Oxfam wants the EU to scrap its ambition to use biofuels in one-tenth of its transport fuel by 2020. The EU's stated goal was to reduce greenhouse gas emissions and reduce European dependence on foreign oil, but Bailey told reporters that biofuels would accomplish neither goal.

"Biofuels are taking over agricultural land and forcing farming to expand into lands that are important carbon sinks, like forests and wetlands," claims the report. "This triggers the release of carbon from soil and vegetation that will take decades to repay."

The report also said Western tariffs and subsidies were just compounding the problem. "Rich countries spent up to $15 billion (€10 billion) last year supporting biofuels while blocking cheaper Brazilian ethanol," read the report, "which is far less damaging for global food security."

But Brazilian President Lula da Silva himself is a fan of biofuels. He has said the Western demand for them has created a new agricultural market that helps farmers in Africa, Central America and the Caribbean raise themselves from poverty.

msm/ap/reuters