Biofuel programs need rethink: UNDP

A process operator shows a handful of corn at the GreenField Ethanol plant in Chatham, Ontario, April 10, 2008.

YOKOHAMA, Japan (Reuters) - Production of biofuels is worsening the global food crisis and should be reexamined, the United Nations Development Program (UNDP) said on Thursday.

In an interview with Reuters, UNDP Administrator Kemal Dervis, who runs a development network covering 166 countries, called for coordination to cope with spikes in food prices and an integrated strategy for development and climate change.

The world has seen a huge jump in food prices this year due to what analysts have called a "perfect storm" of factors including increased demand from developing countries, growth in biofuels production and escalating oil prices.

"There are many causes," Dervis said. "One of them is the ethanol programs that are based on food crops, which are being subsidized by some of the rich countries ... This is something that needs to be looked at very carefully."

He said production of biofuels by rich countries was "contributing a lot to increase in prices of crops" and that they should not be subsidized as heavily as they are now.

Biofuels will be discussed at a food crisis summit in Rome on June 3-5.

Anti-poverty activists say the biofuels industry is exacerbating the crisis by consuming food crops, while a leading U.S.-based agricultural research group has called for a moratorium on grain and oilseed-based biofuels to help cut crop prices substantially.

"One important thing we are discussing is that the fight against climate change and fight against poverty should not be viewed as two separate things. They must be integrated into the overall strategy," said Dervis, in Japan for the fourth round of the Tokyo International Conference on African Development.

BETTER COORDINATION

"That the strategy vis-a-vis climate change went ahead without coordination and without being part of the overall strategy for development."

Dervis said lack of coordination had slowed progress in tackling the food crisis and development, and called on the international community to work together to help the poor.

"Unfortunately, very often the world only acts when there is a crisis. It does not act to prevent the crisis. It acts when it is almost too late and that is not so good," he said.

"In fact, if the world and the international community had been able to coordinate better, we probably would not be in this very difficult situation right now."

He said the food crisis made it more difficult to meet the U.N. Millennium Development Goals, a set of eight globally agreed targets to be reached by 2015.

As this year marks the halfway point to achieve the goals, which include halving the number of people living in poverty on less than $1 a day and providing universal primary education, concerns are growing that most countries will fail to meet them.

Japan chairs the Group of Eight meetings of rich nations this year and has put the food price crisis and climate change on the key agenda for the G8 leaders' summit in Japan's northern island of Hokkaido in July -- a step Dervis welcomed.

But Dervis went further and called on Tokyo to do more to get voices of poor countries heard at the international stage:

"The time when a small group of rich countries make all the decisions should be passed."