By Javier Blas and Guy Dinmore in Rome
Financial Times
June 3 2008
Rich countries came under attack on Tuesday at the United Nations food summit for their biofuel subsidies and production targets, declining spending on development aid for agriculture and large subsidies to European and US farmers.
Jacques Diouf, director-general of the Food and Agriculture Organisation, told heads of state and governments gathered in Rome that ”nobody” understood why cereals had been diverted from human consumption ”mostly to satisfy a thirst for fuel vehicles”.
In an unexpectedly strong attack on western countries’ policies, he added that ”nobody understands” why rich countries had ”distorted world markets with the $272bn (€175bn, £138bn) spent on supporting their agriculture.” Mr Diouf said: ”The problem of food insecurity is a political one.”
Delegates and some FAO officials were surprised by his remarks, which opened a three-day summit in Rome to discuss ways to tackle soaring food prices. The cost of agricultural commodities has doubled since 2005.
Ban Ki-moon, UN secretary-general, was more conciliatory, saying the world needed to reach a ”greater degree of consensus on biofuels”, but stopped short of condemning them. Mr Ban aimed his criticism instead at developing countries that have imposed export bans on foodstuffs, such as India, Egypt and Argentina, asking them to lift the restrictions or at least ease them to allow humanitarian shipments of food. ”Some countries have taken action by limiting exports,” he said. This ”distorts markets and forces prices even higher. I call on nations to resist such measures and to immediately release exports designated for humanitarian purposes.”
Mr Ban also said as important as tackling the food emergency was to plan for a 50 per cent increase in food production by 2030. This was needed to match the expected increase in demand as the world’s population grows. ”The world needs to produce more food,” he said.
Diplomats said biofuels and trade restrictions were the most divisive issues to be surmounted before the summit’s declaration, to be issued tomorrow. Officials suggested a year-long international discussion on best practices for biofuels and another summit next year.
Luiz Inácio Lula da Silva, Brazil’s president, rebuffed the criticism on biofuels, saying some lobbies wanted to create a ”smoke screen blaming ethanol for the recent food inflation”. The link between biofuels and food prices, Mr Lula da Silva added, ”does not stand up”.
”The increase of food prices does not have a single explanation. It is a mix of soaring oil and fertiliser prices, climate change, speculation, growing consumption in developing countries such as China, India and Brazil, and the absurd protectionist [agricultural] policies of rich countries,” he said, echoing comments from US officials.
European leaders, including French President Nicolas Sarkozy, acknowledged biofuels’ role in pushing up food prices but there was little suggestion the EU may drop its support for biofuels.
http://www.ft.com/cms/s/0/942abd34-3108-11dd-bc93-000077b07658.html