A soon-to-be released World Bank study argues that biofuels are to blame for 75% of the rise in food costs, a far higher number than the 10-25% estimate in many earlier calculations.
Even the U.N. Food and Agriculture Organization and the International Food Policy Research Institute have estimated that biofuel production has accounted for only 30% of the price rise. The combination of higher energy prices and related increases in fertilizer prices, as well as the weakness in the U.S. dollar, was directly attributable to the 35% jump in food prices from January 2002 until February 2008, said Donald Mitchell, lead for Commodity Studies at the Bank and the author of the internal report.
"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably, and price increases due to other factors would have been moderate," says the report.
The report goes onto approximate that higher energy and fertilizer prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% increase over that period.
With food prices steadily increasing due to gasoline and diesel prices, and recent tornadoes and flooding, this isn't good news for the biofuels industry. Furthermore, World Bank President Robert Zoellick has estimated that the surging prices could push 100 million more people deeper into poverty.
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