The New Republic

The Guardian says they have a leaked
report from the World Bank that biofuels are responsible for 75% of the
recent rise in food prices:

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 fertiliser prices accounted for an
increase of only 15%, while biofuels have been responsible for a 75% jump over
that period.

The study’s figures contrast sharply with the USDA’s
assertion that biofuels only account for some 3% of the price hikes. But according
to the Guardian’s description of the study, biofuels have distorted food markets
by: 1) Diverting grain away from fuel; 2) Incentivizing farmers to devote land
for biofuel production; and 3) Sparking financial speculation in grain markets.
But though the report was finalized in April, the World Bank has yet to release
the findings.

So why has the report been suppressed? The Guardian, citing
unnamed “senior development sources,” says it was to avoid embarrassing Bush,
an adamant
supporter of biofuels and corn-based ethanol. Grist speculates
that World Bank president Robert Zoellick--formerly a high-ranking member of
the Bush administration--might have had a big hand in keeping the findings
quiet.

But I’d also point out that, whatever his political
loyalties, Zoellick has consistently opposed the kinds of market-distorting
subsidies that have driven biofuel production in the United States. Even under Bush,
Zoellick agreed to significant reductions
in U.S.
grain, rice, and soybeans subsidies during WTO talks, and he has made the
development of free trade and open markets a marked priority
during his tenure as Bank president. Given the outsized impact of escalating
food prices on the world’s poor, for Zoellick to bury the report’s findings
would be particularly outrageous.

At the same time, I’ll concede that it’d be a tricky time
for the Bank to cast a harsh light on America’s own food and energy policies,
given Zoellick’s plea last
week for the G8 to open up their pocketbooks and help the starving.

--Suzy Khimm

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