France seeks pause on biofuels competing with food

PARIS Wed Sep 12, 2012 9:01am EDT

PARIS (Reuters) - France will call for a pause in the development of biofuels competing with food at both international and European level in a bid to avoid crisis prompted by surging grain prices.

"(France) will push for a pause in the development of biofuels competing with food," a government spokeswoman said after a cabinet meeting on Wednesday.

Biofuels are made mostly of grains and oilseeds whose prices have reached record highs this year due to droughts in the U.S. Midwest and the Black Sea region, prompting global alarm over the potential for a food crisis of the kind seen in 2007/08.

The move is in line with a bid by the European Union executive seeking to impose a limit on the use of crop-based biofuels over fears they are less climate-friendly than initially thought and compete with food production, as shown in a draft EU legislation seen by Reuters.

The European Commission's plan still needs to be approved by EU government and lawmakers.

Internally, France already plans to cap at 7 percent -- the current level -- the use of crop-based biofuels in fuels, a read-out of a cabinet meeting showed.

BETTER INTERNATIONAL COORDINATION

The United Nation's Food and Agriculture Organisation (FAO) called last month for a relaunch of the debate on biofuel policies and for look at ways to make them more flexible to reduce the risk of food crises and stepped up the pressure on the United States to change its biofuel policies.

Under the five-year-old Renewable Fuels Standard (RFS), U.S. fuel companies are required to ensure that 9 percent of their gasoline pools are made up of ethanol this year, which means converting some 40 percent of the corn crop into the biofuel.

France said it would mobilise G20 farm bodies to ensure good coordination of policies between large producing countries, the government spokeswoman said.

After the meeting Stephane Le Foll repeated that he envisaged calling a meeting of a G20 agriculture body on rising prices but would wait until later in the month, after the release on Wednesday of a key U.S. government report, before calling a meeting.

Following French President Francois Hollande's proposal on Tuesday to create global strategic food stocks, the government said France would "relaunch with the FAO initiatives to produce more and store better to meet emergency situations."

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