Did Biofuels Send World Food Prices Soaring? Not Really.

A World Bank report leaked today blames the trend toward biofuels for the spike in food prices around the world. According to the report, published in the Guardian newspaper in Britain, the demand for maize and grain to be used as fuel is responsible for 75 percent of the increase in the cost of food.

It just goes to show you how misguided the World Bank can be.

In reading the fine prnt of the report, we find that what has sent food prices soaring is not the use of foodstuffs to make fuel but speculation in the price of foodstuffs – presumably sparked by the trend toward their use as biofuels.

It just goes to show how special interests use “spin” to promote their agenda. The truth is that rampant speculation in commodities is responsible for soaring fuel and food prices, and any reasonable observer must conclude that this sector of the world market should be regulated. But since unchecked capitalism is such a sacred cow, the World Bank is obliged to blame something else.