Put This in Your Tank

Whoops! Just before this week’s G8 summit in Japan, the Guardian got its ink-stained hands on a confidential World Bank report finding that biofuels were responsible for a shocking 75 percent rise in food prices. That’s far higher than previous estimates, and the Guardian says that the report, which was finalized in April, was suppressed to avoid embarrassing President Bush, whose administration has dismissed the impact of biofuels on the food crisis. Coincidentally, a report on biofuels commissioned by the British government has just been released: It buttresses the World Bank’s conclusions, recommending that the British government “put the brakes on its biofuels policy.”

The confidential World Bank report, which the Guardian calls “a detailed, month-by-month analysis of the surge in food prices,” argues that:

[P]roduction of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.

Meanwhile, at the G8 summit, World Bank president Robert Zoellick personally pleaded for the United States and the EU “to take action to reduce mandates, subsidies and tariffs benefiting grain and oil seed biofuels that take food off the table for millions.” Zoellick also proposed the creation of an emergency global food reserve.