The UN’s Food Agency has stepped up pressure on the United States to change its biofuel policy due to fear over a World Food Crisis.
40 percent of the US corn crop is currently used for biofuel to meet renewable energy targets.
The Food and Agriculture Organisation (FAO) says the US should prioritise growing crops for food rather than for fuel as the US mid-West is facing its worst drought in over half a century.
The U.S. Department of Agriculture has slashed its estimates for the size of the corn crop by more than expected, sending corn futures prices to an all-time high. This follows years of accusations that biofuels drive up the price of corn oils , and the grain needed to produce them to the detriment of global food security.
Since January the price of corn has risen by 19.5 percent, wheat prices have risen by 25.8 percent and rice by 7.7 percent.
The global shortage of these commodities has been caused partly by drought and extreme heat in some parts of the world. While crops elsewhere as in parts of Asia have been wiped out due to severe flooding.
These cereals are also used to feed livestock so this also has a knock-on effect for the price of meat. For every kilogram of beef produced you need around seven kilograms of animal food. 36% of the worldwide grain harvest is used for animal food in developed Western countries.
After the financial crisis, investors found security in raw materials that was lacking in financial products. Trade in agricultural markets has increased as well and speculators have profited by buying and selling large quantities of these goods.
No measures were taken at last summer’s G20 meeting, despite complaints by the former French President, Nicolas Sarkozy:
“Who can accept, while there is not enough to feed the planet and the evolution of the planet, that financiers are exchanging 46 times the physical volume of world wheat market?” He said.
On Sunday August 12 on the last day of the Olympic games, British Prime Minister, David Cameron, has scheduled a conference on hunger in London. But will this make any difference on to how we produce and distribute food in the future?