Michael Giberson
On July 4, The Guardian newspaper reported:
Biofuels have forced global food prices up by 75% – far more than previously estimated – according to a confidential World Bank report obtained by the Guardian.
The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.
The figure emphatically contradicts the US government’s claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.
Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush.
“It would put the World Bank in a political hot-spot with the White House,” said one yesterday….
[The report] argues that production 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.
Other reviews of the food crisis looked at it over a much longer period, or have not linked these three factors, and so arrived at smaller estimates of the impact from biofuels. But the report author, Don Mitchell, is a senior economist at the Bank and has done a detailed, month-by-month analysis of the surge in food prices, which allows much closer examination of the link between biofuels and food supply.
The report points out biofuels derived from sugarcane, which Brazil specializes in, have not had such a dramatic impact.
Also July 4, the Marketplace radio news program ran a brief piece with the reporter.
(HT to Tom Philpott at Gristmill.)
UPDATE: As AWench points out in the comments, and as the WSJ Environmental Capital reports, the report in The Guardian was a little off target. The report wasn’t secret or suppressed, just a working paper making the rounds, still being polished by the author.