FAO calls for review of biofuel policies and subsidies

New Delhi, Oct 7 (UNI) 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, FAO said today in a new edition of its annual flagship, publication 'The State of Food and Agriculture (SOFA) 2008'.

''Biofuels present both opportunities and risks. The outcome would depend on the specific context of the country and the policies adopted,'' said Food and Agriculture Organization (FAO) Director-General Jacques Diouf in a statement in Rome today.

''Current policies tend to favour 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,'' he added.

Biofuel production based on agricultural commodities has increased more than three-fold from 2000 to 2007, and now covered nearly two per cent of the world's consumption of transport fuels. The growth was expected to continue, but the contribution of liquid biofuels (mostly ethanol and biodiesel) to transport energy, and even more so, to global energy use would remain limited.

Despite the limited importance of liquid biofuels in terms of global energy supply, the demand for agricultural feedstocks (sugar, maize, oilseeds) for liquid biofuels would continue to grow over the next decade and perhaps beyond, putting upward pressure on food prices.

If developing countries can reap the benefits of biofuel production, and if those benefits reach the poor, higher demand for biofuels could contribute to rural development.

Growing demand for biofuels and the resulting higher agricultural commodity prices offer important opportunities for some developing countries. Agriculture could become the growth engine for hunger reduction and poverty alleviation.

The next generation of biofuels, currently under development but not yet commercially available, using feedstocks such as wood, tall grasses, forestry and crop residues, could improve the fossil energy and greenhouse gas balance of biofuels.

''There seems to be a case for directing expenditures on biofuels more towards research and development, especially on second- generation technologies, which, if well designed and implemented, could hold more promise in terms of reductions in greenhouse gas emissions with less pressure on the natural resource base,'' Diouf said.

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