World Bank report could undermine biofuel support - Reuters

[Eugene]

Source: Reuters

World Bank report could undermine biofuel support
Wed Jul 9, 2008 2:59pm EDT

By Lesley Wroughton - Analysis

WASHINGTON (Reuters) - A leading World Bank
economist's claims that biofuels are a major cause
of soaring world food prices could further undermine
support for the alternative fuel worldwide and cause
tensions with the White House, which fervently
supports the new industry.

The draft report by the World Bank's top agricultural
economist, Don Mitchell, estimates that the growing
use of food for fuel, combined with low grain stocks,
market speculation and export food bans, contributed
as much as 75 percent of the 140 percent rise in
prices between January 2002 and February 2008.

The remainder of the increase is due to a weakening
U.S. dollar, higher energy prices and related increases
in fertilizer costs, he said.

"Increased biofuel production has increased the demand
for food crops and been the major cause of the increase
in food prices," said Mitchell, who is widely respected
for his work on agricultural policies and production.

-snip-

Read more: http://www.reuters.com/article/ousiv/idUSN0832016620080709