Global RFA: UN should reveal oil impact on food

By | September 23, 2010
Posted Sept. 24, 2010

The Global Renewable Fuels Alliance is challenging the Food and Agriculture Organization of the United Nations to reveal the true impact that crude oil prices have on food pricing and recognize that our heavy reliance on crude imports is one of the leading causes of food inflation and price spikes. The Food and Agricultural Organization of the UN is holding an extraordinary meeting of the Intergovernmental Group on Grains and Rice in response to recent surge in wheat prices and rising concerns of wheat shortages as a result of drought in the Russian Federation.

"The FAO has recognized a variety of drivers behind food price spikes, such as drought, energy prices and trade restrictions; however, the impact of crude oil prices on food inflation cuts across all national boundaries and has a disproportionate impact on food prices," said GRFA spokesperson, Bliss Baker. "As long as we are dependant on crude oil for our primary source of energy, we will continue see food prices climb as crude oil prices climb."

This crude oil / food price connection is even more acute in developing countries where 37 of the 44 poorest countries on earth are net energy importers, the organization explained. The rising long-term outlook for energy prices puts true food security for many of these countries in jeopardy. According to the FAO, "increased demand for biofuels will help revitalize the worldwide agricultural sector without putting our secure food supply in jeopardy." Next generation biofuels production hold even greater promise and will create new markets for farmers in developing countries and help bring unproductive land into production."

"We are all very concerned about food price spikes and we certainly support the World Bank's recent analysis highlighting the crippling impact of oil prices and drought on food prices," Baker said. "There is no doubt that biofuels are part of the solution. They reduce our reliance on crude oil and therefore limit the impact of crude oil prices on food inflation."

The Global Renewable Fuels Alliance is an international federation representing more than 65 per cent of the world's renewable fuels production from 30 countries. Through the development of new technology and best practices, its members are committed to producing renewable fuels with the smallest possible ecological footprint. The GRFA promotes the expanded use of ethanol and biodiesel throughout the world; advocating for sound public policy and responsible research to help meet the world's energy, environmental and economic challenges.