The European Union’s promotion of plant-based biofuels will raise EU farm incomes and agricultural commodity prices, but could create food shortages for the world’s poorest consumers, draft EU reports show. The EU has a legal target to get a tenth of its road transport fuels from renewable sources such as biofuels by 2020. For EU farmers hit by falling incomes, Europe’s 5 billion euros-per-year ($6.84 billion) biofuels market is coveted as a source of new revenues.
Impact studies drafted for EU policymakers — included in 116 documents released to Reuters under freedom of information laws — predict that current biofuel policies will boost EU farm incomes by 3.5 percent in 2020. But the studies also reveal concerns about the unintended impact of Europe’s thirst for biofuels.
“A new and strongly growing non-food demand for agricultural output will undoubtedly boost farm prices and hence farmers’ incomes,” one report says. “However, the desired effect may come at a potentially high cost: a human cost paid by the world’s poorest consumers who may face higher food prices or food shortages.”
High food prices in 2008 led to food riots in some developing countries and were partly blamed on biofuels such as ethanol consuming part of the U.S. corn crop. “The simulated effects of EU biofuels policies imply a considerable shock to agricultural commodity markets,” the report reads….