IMF economist criticises biofuels strategies

Simon Johnson, IMF’s chief economist, says that Europe’s and the United States’ approaches to biofuels production inevitably have a negative influence on food prices.

Speaking on the Today programme on BBC Radio 4 in the UK, Johnson estimated that around twenty to thirty per cent of the increase in food prices over the last few years could be laid at the door of biofuels.

Everybody’s in
“It’s true for corn based ethanol in the United States, and that spills over to wheat and we know that’s knocked onto other crops in various ways. But biodiesel is a similar kind of issue in Europe, so I’m afraid everybody’s in this,” he said.

Better ways
When asked specifically about the US, Johnson said that, “our position has been that the subsidy structure and particularly the tariffs that are used in the United States, for example, are not a good idea and these should be dismantled as soon as possible. If you want to provide for support agriculture, there’s better ways to do that. If you want to support technology and development, there’s better ways to do that. If you want to address issues of food supply or food availability, there’s better ways to do that. So unfortunately, we’ve got a combination of policies that doesn’t make a lot of sense.”