Mon, May 12 2008
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Published May 06, 2008 03:33 pm - Price increases in food have to do with demand, lower production in China, more speculation E.U. leader: biofuels blame for food overblown The European Union's senior agriculture official defended the bloc's push for biofuels Tuesday and said biofuel crops are being unfairly blamed for soaring food prices around the world.
Mariann Fischer Boel, the EU's commissioner for agriculture, said other, larger factors were behind the price increases, which have triggered public unrest, especially in Asia and Africa. The production of biofuel crops such as canola, corn, soybeans and sugarcane has led to the deforestation and a reduction of land available for growing crops for food. That has led many experts to blame such crops for contributing to the price rises. British Prime Minister Gordon Brown is among those who have called for a re-examination of the push for biofuels, which have been promoted as a way to reduce pollution and fight global warming. Fischer Boel, speaking at a biofuels conference, said the issue was more complex and the concern over biofuel crops was overblown. She said bigger factors were at work, namely increased demand for meat and dairy products, particularly in China and India, which has reduced farmland for growing food crops. She also noted that bad weather in 2006 in North America, Russia, the 27-nation EU and in Australia last year led to less production. Also — but harder to quantify — grain and other food commodity speculators have pushed up prices, she said. She said investments in commodity indexes that totaled US$10 billion in 1998 reached US$142 billion by 2007. In February alone, 140 commodity-based financial products were launched for investors, according to EU data. That is double the number issued each month in 2006 and 2007. 
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