OECD chief calls for biofuels review

A worker pumps gasoline blended with 10% ethanol at the UPI Energy gas station in Chatham, Ontario, April 11, 2008.

PARIS (Reuters) - OECD chief Angel Gurria threw his weight behind genetically modified (GM) crops on Thursday as an antidote to high food prices and called for a "serious review" of the production of biofuels such as ethanol.

Gurria was speaking after presenting a report with the head of the UN food agency, which forecast high food prices over the next 10 years.

The food price report by OECD and UN Food and Agriculture Organization (FAO), published before the world food summit in Rome next week, suggested GM crops could help boost output to feed more people and livestock.

It also questioned the merits of government-sponsored plans to promote the grain-guzzling production of ethanol fuels as an alternative transport fuel, but without calling outright for a repeal of big ethanol targets, such as exist in the United States and the European Union.

Asked after a news conference if he was calling outright for promotion of GM crops and a moratorium on government-supported promotion of biofuel, Gurria told Reuters. "I am saying genetically modified crops are part of the solution."

"I'm saying it's time for a serious review," he said, adding: "We'll see then what action should be taken."

An OECD official who penned much of the report said another report on biofuel policies in particular would be completed by the Organization for Economic Co-operation and Development in a month or so, and that current biofuel promotion policies were based perhaps on hasty and oversimplistic assumptions.

"The benefits are probably less than expected," said Loek Boonekamp of the OECD agricultural policy division, adding that one-third of the food price increase of the decade ahead would be due solely to biofuel production.

FAO head Jacques Diouf, in Paris for the presentation of the report, declined to be drawn when asked if he too was demanding a freeze of government-aided, biofuel-promotion projects, but he said he feared further distortions were afoot.

"We mustn't repeat the same farm policy errors of the past, for which developing countries have paid dearly," he told the news conference, where he said the FAO-hosted food summit would draw 40 leaders and 1,500 envoys from 150 countries.

He said he hoped the summit would come up with both urgent answers to the rising hunger risk -- a matter of humanitarian aid primarily -- and ideas on long-term food security.

(Editing by Christopher Johnson)