US Downplays Impact of Biofuel Subsidies on World Food Prices

American subsidies for biofuels has emerged as the focus of controversy at this week's UN food summit even before the meeting formally started this morning.

The US agriculture secretary, Ed Schafer, stirred controversy on the eve of the Rome summit with his defence of corn ethanol, arguing that biofuel production only contributed "2 to 3%" to the recent dramatic rise in global food prices.

The claim clashed with research carried out by several international organizations. The International Monetary Fund (IMF) has estimated that 20 to 30% of the food price increases in the past two years are accounted for by biofuels, and that last year they accounted for about half the increase in demand for principle food crops.

The OECD has published an estimate that, between 2005 and 2007, biofuels explained nearly 60% of the increase in consumption of cereals (principally in the US) and vegetable oils (mainly in Europe).

Rob Bailey, a biofuels expert at Oxfam, questioned the accuracy of Schafer's claims and said it was critical to focus on eliminating biofuel subsidies in the US as it was one of the few policy levers in the hands of western governments.

"We can't control the weather, we can't control the growth of demand in China, we can't control the oil price but we can control biofuels policy, because it's politically created in the first place."

Schafer said he was prepared to examine conflicting evidence about biofuels and if the US numbers were wrong, "then the United States is going to have to develop a public policy that is appropriate in the global marketplace." But he added: "We can't say what that is right now because we believe our numbers are correct."

He also repeated US claims that corn ethanol was "an efficient producer of energy" despite studies suggesting that it offered little or no environmental benefits over fossil fuels.

The Brazilian president, Luiz Inácio Lula da Silva, also came to Rome to defend his country's cultivation of sugarcane ethanol. Brazilian officials were this morning distributing glossy brochures extolling the fuel's environmental and social benefits.

Bailey said that Brazil's biofuel program would be less controversial than America's, as the price of sugarcane is not strongly correlated to the world prices of staple foods and Brazil had extensive arable land not being used to full capacity.

In his opening speech, the UN secretary general, Ban Ki-Moon had been expected to criticise US subsidies for biofuels, which amount to about $11bn (£5.6bn) a year. But in the final text he said only: "We should reach a greater degree of international consensus on biofuels."