US should change bio fuel policy to avoid food crisis said UN

The U.N.'s food agency stepped up the pressure on the United States on Friday to change its biofuel policies because of the danger of a world food crisis, arguing the importance of growing crops for food over their use for fuel.

Global alarm over the potential for a food crisis of the kind seen in 2007/08 has escalated as drought in the U.S. Midwest has sent grain prices to record highs, fuelling a 6 percent surge in the UN Food and Agriculture Organisation's July food price index.

The FAO's Director-General Jose Graziano Da Silva wrote in the Financial Times on Friday that competition for a U.S. corn crop that has been ravaged by the worst drought in 56 years was only going to intensify.

"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 wrote in an editorial.

"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," he said in the high profile yet indirect message to Washington.

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

The U.S. Department of Agriculture on Friday slashed its estimates for the size of the corn crop by more than expected, sending corn futures prices, already up 60 percent since June, to a fresh all-time high.

Keywords – US should change bio fuel policy to avoid food crisis, FAO’s Director wrote in financial times.