D8 summit calls for halt to biofuels

By John Aglionby in Kuala Lumpur
Published: July 8 2008 07:09

The world should halt the development of biofuel crops on arable land and instead boost agricultural production to solve the global food crisis and prevent “disaster”, the Malaysian and Indonesian leaders warned on Tuesday at the opening of a developing countries summit.
Abdullah Badawi, the Malaysian prime minister, said the use of arable land for biofuels “should be stopped because such action will deepen the global food scarcity and further drive up food prices”.

“We must not allow the zeal for energy security to come into direct conflict with the basic need for food production,” he told the Developing Eight summit in Kuala Lumpur.
The D8 comprises Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey. All are prominent members of the Organisaton of the Islamic Conference.
Susilo Bambang Yudhoyono, the Indonesian president, blamed “some developed countries” for exacerbating the food crisis by allowing biofuel development on arable land.
“The idea is to reduce greenhouse gases and to wean themselves away from dependence on fossil fuels,” he said in his speech. “It is not a good idea: it has only worsened the global food crisis.”
The leaders’ statements join a growing consensus that biofuel production has contributed more to soaring food prices than was thought to be the case until a few months ago.
On Monday Britain hinted it might reassess its biofuel targets after a review by a former Environment Agency chief indicated that while there is probably enough land to meet agricultural needs until 2020, biofuels had contributed to rising food prices. The World Bank has expressed similar sentiments to the British report.
Mr Yudhoyono predicted there would be “no quick fix” to the crisis.
“But we must act on it at once and in concert,” he said. “To delay concerted action on this great challenge of our time is to court disaster.”
The president is now en route to Japan to meet with the G8 leaders on Wednesday. Indonesian officials said he would urge the G8 members to “share the burden” endured by developing countries in the face of soaring oil and food prices.
Both Mr Badawi and Mr Yudhoyono stressed the need to find ways to boost agricultural production. Neither, however, mentioned whether they would halt, let alone reverse, their planned expansions of oil palm plantations.
Indonesia and Malaysia are, respectively, the world’s largest and second largest producers of palm oil, which is becoming increasingly popular as a biofuel.
Much of the development, particularly in Indonesia, has come at the expense of vast swathes of rainforest, which is widely considered to exacerbate climate change.
Mr Badawi also took aim at the oil futures market, suggesting the international community “examine how [it] might be organised to assist in stabilising [oil] prices.”
He said the summit should send a united message on how to confront the oil and food price crises. Analysts believe the D8 will struggle to reach consensus on what to do about high oil prices because it comprises both significant oil producers and consumers.
The summit is also expected to approve a roadmap to strengthen cooperation between D8 members, particularly on intra-member trade. The aim is to boost this from the current figure of $60bn to $517.5bn within a decade.
Copyright The Financial Times Limited 2008