Darling Calls for Urgent Review of Biofuel Policies

Alistair Darling has demanded an urgent review of international biofuel programs as part of a plan to tackle the world's mounting food crisis. The Chancellor said he had asked the World Bank to produce an analysis - for June's G7 meeting of global leaders - on the impact of green policies, including America and Europe's biofuel programs, on global food shortages.

'This is an urgent problem,' said Darling, who was speaking in Washington at a meeting of G7 leaders. 'People across the world will say, "Why didn't you see this coming?" when it is staring us in the face. We have got to take action.'

He added: 'It would be a profound mistake if we get into a situation where we are growing corn that is essential for feeding people and converting it into fuel. That is not sustainable.'

The move to re-examine links between food shortages and global biofuel policies comes as riots have gripped many of the world's poorest nations. Demonstrators have protested, with increasing violence, about the soaring prices of wheat, rice, soya and other staples.

In Dhaka yesterday thousands of factory workers rampaged through the Bangladesh capital in protest against rising food prices, leaving at least 50 people injured. Similarly, in Egypt, Indonesia, Ivory Coast, Mauritania, Mozambique, Senegal and Cameroon there have been demonstrations, sometimes involving fatalities, as starving, desperate people have taken to the streets.

The soaring cost of food has been a key issue among the world's finance ministers, gathered in Washington this weekend for the spring meetings of the World Bank and International Monetary Fund.

Darling added that the problem was also hitting Britain's shoppers. 'People can see the price of bread has gone up in the shops', he said. 'For the first time in a generation we are seeing inflationary pressures that are not home-grown but are being imported. Food prices are rising. Energy prices are rising. Commodity prices are rising.'

Darling said there was an urgent need to provide developing countries with the infrastructure to enable them to grow more food and urged a speedy conclusion of global trade talks, which he said would open up markets and reduce subsidies.

The US policy of subsidizing its corn-belt farmers to devote their crops to fuel has come under fierce criticism at the meeting in Washington. In a study of the causes of rising commodity prices last week, the IMF found that America's appetite for biofuel had been a major factor. More biofuel crop production meant reductions were being made in grain and soya growing, pushing up prices.

As a result, Robert Zoellick, the president of the World Bank, urged countries that were subsidizing biofuels to make generous contributions to the World Food Program, to meet the urgent need to get emergency food supplies to the world's poorest people.

Zoellick said rocketing food prices had set back the fight against poverty by seven years. Responding to Zoellick's call for $500m to be pledged this weekend by rich countries for emergency food aid, Darling said: 'We are happy to play our part in that. This is a sortable problem providing people have the political will.'

Darling warned that, without concerted action to boost food supplies and tackle hunger on developing countries, the millennium development goals would be missed. 'If the developed world is serious about meeting the millennium development goals - and we are currently way off track - we have got to do something about rising food prices,' he said.

Tony Juniper, director of green campaign group Friends of the Earth, said the dash to grain-based biofuels should now be halted, because the unintended consequences have become so damaging.

'Policymakers have inadvertently created a competition between the drivers of big vehicles and people who do not have enough food to eat,' he said.