OECD official urges that biofuel subsidies be scrapped

(BERLIN) - An OECD agriculture official urged on Monday that biofuel subsidies be scrapped, saying this was the quickest way to fight rising food prices.

"I call urgently for reduced support for biofuels," said Stefan Tangermann, agriculture director for the Organisation for Economic Cooperation and Development.

"It is the only lever on which we can act rapidly," he added during an address to a farm forum in Berlin.

The OECD forecasts that food prices, in particular the cost of cereals, will remain high and that development of biofuels is responsible for around one-third of recent increases.

The use of cropland for biofuels has become a controversial topic.

Big producers of ethanol such as Brazil and the United States deny there is a connection between increased growing of crops for such fuels and higher food prices.

The issue was debated last week by the United Nations food summit in Rome, but no concrete statements or positions resulted.

The European Commission supports expanding biofuel agriculture and would like 10 percent of all transport to be driven by such fuels by 2020.

That goal is "imperative," stressed Klaus-Dieter Borchardt, a deputy to EU Agriculture Commissioner Mariann Fischer Boel.

He warned against making biofuels "the whipping boy" of soaring farm prices.

Borchardt said "the first generation of biofuels is in a necessary transition phase" and crops would eventually be replaced by waste products and wood as sources of energy.