Go easy on biofuels until more clarity: World Bank

By Lesley Wroughton

WASHINGTON (Reuters) - A senior World Bank official said on Thursday that countries should not greatly increase biofuels production until there is more clarity about how much they have contributed to the global food price crisis.

Juergen Voegele, director for agriculture and rural development department at the World Bank, cautioned against shifting a lot of the blame to biofuels but also said massive subsidies for the biofuel industry was not helping the crisis.

"We don't think it's advisable to vilify biofuels and make it responsible for all evil at the moment, nor do we think we can continue to support biofuels the way it is supported at the moment in many countries," Voegele told Reuters.

He said the World Bank was analyzing biofuels on several fronts, including its economic, environmental and social value.

"The interlinkages with food production are complex, and we need to get a much better understanding of what is sustainable in the long run," said Voegele. "There are a lot of expectations that second and third-generation biofuels will have better economic, environmental and social balance sheets."

Experts blame the food crisis on the conversion of land to grow crops for biofuel, as well as drought, changing diets in fast-growing developing countries and more expensive fuel.

Riots in poor Asian, African and Latin American countries have followed the steep rise in food prices, which has also prompted governments to revert to old and potentially damaging controls.

Anti-poverty activists argue that the biofuels industry is exacerbating the crisis by diverting needed 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.