News

June 29, 2008

That Was The Week That Was: Confusion Reigns In The US Over Biofuel Numbers, And The Argentine Agriculture Crisis Rumbles On

By Sally White

A row is brewing in the US over the extent to which biofuels have contributed to rising grain prices. The Inspector General at the US Department of Agriculture (USDA) has been asked to investigate conflicting numbers presented by Bush administration officials. This comes at a time when the US is also investigating the extent to which speculative funds have pushed up grains prices in commodity markets.

First up, US Agriculture Secretary Edward Schafer said in a speech in Rome that biofuels had contributed two to three per cent to the overall increase in global food prices last year. Then, a few days later the USDA’s chief economist Joseph Glauber said biofuels contributed 10 per cent overall.

Now members of Congress are demanding to know why there were two sets of numbers, and whether the government used the more benign numbers in Rome as a way of playing down the role...