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U.N. against biofuel

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15 August 2012

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The U.N.’s food agency is ramping up the pressure on the United States. It wants the country to change its biofuel policies because of the possibility of a world food crisis. The agency is warning the importance of growing crops for food, instead of fuel.

This year’s drought in the U.S. Midwest has sent grain prices soaring to record highs. This has triggered global alarm over the potential for a food crisis – much like the one we saw back in 2007 and 2008. The drought has contributed to a 6% surge in the UN Food and Agriculture Organisation’s July food price index.

Jose Graziano Da Silva is the FAO’s Director-General. He believes that competition for a U.S. corn crop, ravaged by the worst drought in 56 years, is only going to intensify. In a Financial Times editorial this week, he wrote: “Much of the reduced crop will be claimed by biofuel production in line with U.S. federal mandates, leaving even less for food and feed markets.” He went on to say, “An immediate, temporary suspension of that mandate would give some respite to the market and allow more of the crop to be channelled towards food and feed uses.”

Under the Renewable Fuels Standard (RFS), U.S. fuel companies are required to ensure 9% of their gasoline pools are made up of ethanol this year. That means converting some 40% of the corn crop into the biofuel.

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