by Aditya Chakrabortty

July 4, 2008

from TheGuardian Website

A handful of corn before it is processed.

Photograph: Charlie Neibergall/AP

Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian.

The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.

The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.

Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush.

"It would put the World Bank in a political hot-spot with the White House," said one yesterday.

The news comes at a critical point in the world's negotiations on biofuels policy. Leaders of the G8 industrialized countries meet next week in Hokkaido, 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.

It will also put pressure on the British government, which is due to release its own report on the impact of biofuels, the Gallagher Report.

Gallagher report calls the impacts of biofuels 'real and significant'

The Guardian has previously reported that the British study will state that plant fuels have played a "significant" part in pushing up food prices to record levels.

Although it was expected last week, the report has still not been released.

"Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises," said Robert Bailey, policy adviser at Oxfam. "It is imperative that we have the full picture. While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat."

Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt. Government ministers here have described higher food and fuel prices as "the first real economic crisis of globalization".

President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that:

"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, calculates the report, have had a marginal impact. Instead, it argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices.

Since April, all petrol and diesel in Britain has had to include 2.5% from biofuels. The EU has been considering raising that target to 10% by 2020, but is faced with mounting evidence that that will only push food prices higher.

"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," says the report.

The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertilizer prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.

It argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.

Other reviews of the food crisis looked at it over a much longer period, or have not linked these three factors, and so arrived at smaller estimates of the impact from biofuels. But the report author, Don Mitchell, is a senior economist at the Bank and has done a detailed, month-by-month analysis of the surge in food prices, which allows much closer examination of the link between biofuels and food supply.

The report points out biofuels derived from sugarcane, which Brazil specializes in, have not had such a dramatic impact.

Supporters of biofuels argue that they are a greener alternative to relying on oil and other fossil fuels, but even that claim has been disputed by some experts, who argue that it does not apply to US production of ethanol from plants.

"It is clear that some biofuels have huge impacts on food prices," said Dr David King, the government's former chief scientific adviser, last night. "All we are doing by supporting these is subsidizing higher food prices, while doing nothing to tackle climate change."

World Bank Secret Report

Confirms Biofuel Cause of World Food Crisis
by F. William Engdahl
July 10, 2008

from GlobalResearch Website

A secret study by the World Bank, which reportedly has not been made public on pressure from the Bush Administration, concludes that bio-fuel cultivation in especially the USA and EU are directly responsible for the current explosion in grain and food prices worldwide. The US Government at the recent Rome UN Food Summit claimed that "only 3% of food prices" were due to bio-fuels.

The World Bank secret report says that at least 75% of the recent price rises are due to land being removed from agriculture—mainly maize in North America and rapeseed and corn in the EU—in order to grow crops to be burned for vehicle fuel.

The World Bank study confirms what we wrote more than a year ago about the madness of bio-fuels. It fits the agenda described in the 1970’s by Henry Kissinger, namely,

‘If you control the food you control the people.’

According to the London Guardian newspaper which has been given a copy of the suppressed report, the World Bank study was completed in April, well before the June Rome Food Summit, but was deliberately suppressed as "embarrassing to the position of the Bush Administration."

The President of the World Bank, Robert Zoellick, is a former top Bush Administration official. Washington is trying to use a crisis which its bio-fuel subsidies created, since a new Farm bill passed in 2005, to advance the spread of Genetically Manipulated Organisms such as GMO maize, soybeans, rice and other crops patented by Monsanto and other "gene giants."

Their strategy is to use the explosive rise in grain prices worldwide, a rise fuelled by hedge funds and troubled US and European banks and investment funds pouring billions of dollars into speculation that grain prices will continue to soar.

In other words, the food "crisis" is a crisis of speculation in food futures.

The planned EU and USA bio-fuel acreage quotas and the periodic droughts and floods in key growing regions such as the USA Midwest then provide backdrop for speculative price run-ups.

But the main driver is that tens of millions of hectares of prime agriculture land in the world’s two largest food export regions - the USA and the EU - are being permanently removed from food production in order to grow raw material to be burned for vehicle fuel.
 

The suppressed study

The World Bank study, the most detailed analysis of the global food crisis so far, concludes that bio-fuels have forced "food prices up by 75%." That is far more than previous estimates.

That is a damning refutation of the politically-motivated US Department of Agriculture estimate that plant-derived fuels add only 3% to food prices. The report is expected to increase pressure on the European Union governments as well as Washington to change their present bio-fuel subsidy and support policies.

The report has been leaked just days before the important annual Group of 8 industrial nation leaders’ summit held in Hokkaido Japan. The food crisis will be a major topic there as pressure on governments grows to do something.

The World Bank report estimates that doubling and tripling of world food prices in the past three years have forced an added 100 million people below the poverty line. That has triggered food riots from Bangladesh to Egypt.

The report as well calculates that even the successive droughts in Australia and other major food regions have had only a "marginal" impact on food prices.

Within the EU, for example, as of April all vehicles in the UK must contain fuel with at least 2.5% bio-fuel. The EU has in place a target of mandatory 20% by 2020, a staggering amount.

George W. Bush has cynically claimed higher food prices are merely due to higher demand from India and China.

The leaked World Bank study refutes that:

"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."

"Without the increase in bio-fuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," the World Bank report states.

The basket of food prices examined in the study rose by 140% between 2002 and February 2008. Higher energy and fertilizer prices accounted for an increase of only 15%. Bio-fuels have been responsible for a 75% jump over that period.

The study demonstrates that production of bio-fuels has distorted food markets in three main ways.

1. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going to production of bio-diesel.

2. Second, farmers have been encouraged to set land aside for bio-fuel production.

3. Third, it has sparked financial speculation in grains, driving prices up higher.

The real agenda behind the food crisis

The World Bank study is the first to include all three factors. What is missing from the World Bank study however is the longer-term geopolitical agenda behind the present global food and energy crises.

As I document in great detail in my book, Seeds of Destruction: The Hidden Agenda of Genetic Manipulation, the long term agenda of powerful leading circles in the West, particularly represented in tax exempt private foundations such as the Rockefeller, Ford and Gates foundations and the private wealth behind them, is a long term agenda of population reduction, in the interests of the global economic and financial elites.

Food scarcity, higher prices for basic foods in developing countries as well as control of food seeds through patent and Terminator suicide seed sales by Monsanto, Syngenta, DuPont, Dow, BASF, Bayer and a few select agriculture chemical seed giants—the "horsemen of the GMO Apokalypse," have been developed to advance the agenda of massive depopulation of the developing world.

The policy goes back, as the book documents in detail, to the early years of the 20th Century when Rockefeller, Carnegie, Harriman, Gamble, H.G. Wells, Margaret Sanger, and other wealthy circles backed the development of eugenics research. The Rockefeller Foundation financed the eugenics and forced sterilization research at the Berlin Kaiser Wilhelm Institute (today's Max Planck Institute) until it became too politically hot in 1939.

After the end of the war, Rockefeller and others in the eugenics movement decided for political reasons to change the name of eugenics. The new name they chose was "genetics."

GMO is a project, based on wrong science, financed with over $100 million of private money from the Rockefeller Foundation. The ultimate aim is for the first time in history to control life on the planet.

As Henry Kissinger put in during the 1970’s food crisis, "control the food and you control the people."

In this light it is worth noting that as a solution to a crisis which it deliberately created by its massive government subsidies to farmers to grow bio-fuels instead of food, the Bush Administration made and continues to make a major pressure at the Rome Food Summit in early June and after, to open the doors to GMO as the alleged "solution" to world hunger.

On June 13, just after the Rome UN Food Summit, John Negroponte, US Deputy Secretary of State, stated,

"We therefore are strongly encouraging countries to remove barriers to the use of innovative plant and animal production technologies, including biotechnology," adding, "Biotechnology tools can help speed the development of crops with higher yields, higher nutrition value, better resistance to pests and diseases, and stronger food system resilience in the face of climate change."

Washington and the GMO companies now use the more deceptive term, "biotechnology" instead of the controversial GMO term, in a linguistic ploy to overcome opposition.

Independent scientific studies and countless farmer reports have shown that long-term planting of GMO or bio-tech crops as the gene giants prefer to call it, far from giving higher crop yields, lowers the yields and development of resistant "super-weeds" usually mean more, not less Roundup or other GMO-paired chemical herbicides and pesticides are needed. In short the glorious claims for GMO are marketing fraud.

According to highly informed reports, Washington had been told that Pope Benedict XVI would endorse the spread of GMO, something the Vatican until now has been strongly opposed to on moral and other grounds, as a solution to world hunger. At the last minute that endorsement did not happen for reasons only the Pope perhaps knows.

Groups like Greenpeace and the London Independent newspaper in the days before the Rome UN summit reported interviews with senior Church figures stating that the policy reverse was expected.

There is strong circumstantial evidence that the entire Rome UN Summit was orchestrated by Washington, London’s Gordon Brown and other Malthusian governments in part to try to convince the Pope to reverse its policy on GMO. The Roman Catholic Church today stands as one of the most important moral barriers to widespread acceptance of GMO in many developing countries such as the Philippines and Latin America.

The leak of the World Bank report adds a dramatic new element into what is becoming one of the major political issues along with oil price manipulation.