2.Bio-fuels caused food price rise

GM WATCH comment: The headlines said it all yesterday as Monsanto reported its second-quarter earnings - 'Monsanto profit doubles on weed killer, corn seed'.

Monsanto is still massively benefitting from the US's ethanol engendered corn boom, triggered by George W. Bush's programme of subsidies for ethanol production, and its various knock on effects.

And as corn seed sales have boomed so has the demand for the herbicide Roundup, heavily used on all Monsanto's Roundup Ready varieties.

And on top of the increased sales has come massive price hikes from Monsanto (see item 1) to exploit not just the rising demand but the rising corn and other commodity prices triggered as the diversion of crops to ethanol/'biofuel' production has dramatically depleted global stockpiles. This has hit food production, pushing food prices to record highs with potentially disastrous consequences for the world's poor (item 2).

When you add on to that the environmentally damaging impacts of most 'biofuels', including ethanol, then it becomes clear precisely what Monsanto's record profits are built upon - environmental devastation and pushing the poor to the wall.

---

New Delhi, March 30: The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) in its recent annual survey report for the region has cautioned that the global food prices would remain high and held bio-fuel programme responsible for the same.

'With grains and oil seeds the key feedstocks for bio-fuels, the oil price rise exerted by a strong push on agriculture commodity prices in 2007 which enjoyed their best performance for almost 30 years. As oil hit $100 per barrel in January 2008, soybean prices jumped to a 34-year high, corn prices approached their recent 11-year high, wheat prices were just below their recent all-time high, rapeseed prices rose to record highs and palm oil futures hit a historic high,' the report said.

Not only ESCAP but UNCTAD, other UN agencies and OECD in their earlier reports had also held the bio-fuel programme responsible for the rise in global food prices.

ESCAP noted that for many countries in the region, food prices were a bigger inflationary concern than oil prices. 'Food price inflation hits low-income households, so governments may need to target the poor with food stamps and cash,' it said

As the march towards bio-fuels seems apparently unstoppable, the ESCAP report said that the region needed to prepare for imported inflation through higher food prices .'Governments need to carefully consider the impact of bio-fuels on the poor,' it said.