Biofuels blamed for food price crisis

LONDON (Reuters) - Biofuels have forced global food prices up by 75 percent -- far more than previously estimated -- according to a confidential World Bank report published in a London newspaper on Friday.

The assessment is based on a detailed analysis by Don Mitchell, an internationally respected economist at the global financial body, the Guardian said.

The figure contradicts U.S. government estimates that plant-derived fuels have contributed less than 3 percent to food-price increases, the newspaper said.

It will add to pressure on governments in Washington and Europe, which have turned to biofuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.

The Guardian said senior development sources believed the report, completed in April, had not been published to avoid embarrassing President George W. Bush. "It would put the World Bank in a political hot-spot with the White House," said one source.

Leaders of the G8 leading industrial countries meet next week in Japan, where they will discuss the food crisis and come under intense lobbying from campaigners calling for a moratorium on the use of plant-derived fuels.

Rising food prices have pushed 100 million people worldwide below the poverty line, according to the World Bank, and have sparked riots from Bangladesh to Egypt.

Bush has linked higher food prices to higher demand from India and China, but the World Bank study said: "Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases."

Even successive droughts in Australia have had a marginal impact. Instead, the report said the EU and U.S. drive for biofuels has had the biggest impact on food supply and prices.