The United Nation's Food and Agriculture Organization (FAO) says biofuel policies and subsidies should be "urgently" reviewed in order to preserve the goal of world food security, protect poor farmers, promote broad-based rural development and ensure environmental sustainability.
Biofuels present both opportunities and risks. The outcome would depend on the specific context of the country and the policies adopted, said FAO Director-General Jacques Diouf. Current policies tend to favor producers in some developed countries over producers in most developing countries. The challenge is to reduce or manage the risks while sharing the opportunities more widely.
Biofuel production based on agricultural commodities increased more than threefold from 2000 to 2007, and now covers nearly two percent of the worlds consumption of transport fuels, says the FAO. The growth is expected to continue, but the contribution of liquid biofuels (mostly ethanol and biodiesel) to transport energy, and even more so, to global energy use will remain limited, they add.
Despite the limited importance of liquid biofuels in terms of global energy supply, the demand for agricultural feedstocks (sugar, maize, oilseeds) for liquid biofuels will continue to grow over the next decade and perhaps beyond, putting upward pressure on food prices, says FAO.