It's about time some big name world leaders start pointing out the reality that biofuels are not the root of our current food problems. Might ethanol be a contributor? I'm sure it doesn't help. But it's not the CAUSE. Article here.

Merkel, Like Lula, Rejects Biofuels as Root of Food-Price Rises

By Jeremy van Loon

April 17 (Bloomberg) -- German Chancellor Angela Merkel said soaring prices for rice, milk and other staple foods are not related to global demand for biofuels, and can instead be ascribed to growing affluence in developing countries.

``Millions of people are becoming wealthy, and when 100 million Chinese start drinking milk then that's going to have an impact on food prices,'' Merkel said today in Freiberg, eastern Germany, during a visit to a biofuel plant run by Choren Industries GmbH. ``Those rising global food prices have nothing to do biofuels.''

Merkel's view contrasts with that of Prime Minister Gordon Brown, who last week wrote to leaders of the Group of Eight nations to say the U.K. government is concerned biofuels made from foods such as sugar cane and corn are stimulating inflation and pushing up food prices around the world. President Luiz Inacio Lula da Silva of Brazil, the world's top sugar cane grower, has repeatedly rejected criticism of biofuel production.

``Food is expensive because the world wasn't prepared to see millions of Chinese people, millions of Indians and Africans eating three times a day,'' Lula told reporters in Brasilia yesterday.

Merkel is scheduled to visit Brazil during a week-long trip to Latin America next month.

The price of rice, the staple food for half the world, has doubled in the past year to an all-time high. Global food prices increased 57 percent last month from a year earlier, according to the United Nations Food and Agriculture Organization. Countries such as Indonesia and Egypt have seen unrest over high prices.

Crops vs Biofuels

Demand for biofuels, along with increased competition for cropland between food and fuel uses, is taking up much of the increase in global crop production, according to a World Bank report released April 9. Food production is failing to keep up with demand, the bank said.

Merkel's government aims for 20 percent of car fuel sold in Germany to comprise biofuels by 2020. To meet that goal, Germany will increase its use of two different forms of biofuel, pure ethanol and biodiesel. The European Union wants to power 10 percent of transportation in the region with biofuels by 2020.

The chancellor was joined in Freiberg by Daimler AG Chief Executive Dieter Zetsche and Volkswagen AG Chief Executive Officer Martin Winterkorn to discuss the opportunities for synthetic biofuels.

Synthetic, or second-generation, biofuel is made from plant waste, wood trimmings and straw, unlike ethanol which is distilled from corn or sugar cane and competes with the production of food stuffs for agricultural land.

To contact the reporter on this story: Jeremy van Loon in Freiberg at jvanloon@bloomberg.net.