From: Reuters
Published May 6, 2008 11:55 AM

Biofuels not raising food prices: German ministers

BERLIN (Reuters) - The global production of biofuels is not behind the recent rise in world food prices, two German ministers said on Tuesday.

Germany should retain its target of reaching 20 percent renewable energy use by 2020 including 10 percent biofuels, Agriculture Minister Horst Seehofer told a press conference.

Rising food prices had largely been caused by the growing world population coupled with increasing spending power in several developing regions, he said.

Environment Minister Sigmar Gabriel told a separate press conference that poor harvests, rising spending power and growing financial investment in commodities was a major reason for rising food prices but not biofuel output.


Financial speculators had pushed up commodity prices dramatically and such speculators were "the real locusts" pushing up food prices in the Third World, Gabriel said.

Seehofer said the United Nations' World Food Organisation (FAO) estimated that only two percent of global farmland was used for biofuel crops.

He said he believed Germany could only reach its target of 20 percent renewable energy consumption by 2020 through the use of biofuels to meet 10 per cent of the goal.

German Chancellor Angela Merkel supported this target without reservation, Seehofer said.

Seehofer said a new German biofuels policy concept would be created before the summer at Merkel's request with Seehofer leading the coordination of ministries involved.

The food-verses-energy debate had failed to recognize that food prices were now falling in many sectors, Seehofer said.

"Milk prices are falling, pig prices have collapsed and grain prices are coming under pressure," he said.

Higher long-term food production was needed to counter high global prices, he said.

Germany would press the European Union to permanently end its set-aside scheme under which arable farmers must leave ten percent of their land fallow.

Set-aside was originally aimed to cut EU subsidies and EU food mountains. It has been temporarily suspended for the coming summer 2008 harvest to help counter high EU grains prices.

(Reporting by Michael Hogan; Editing by David Evans)

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