Biofuels ‘not driving up grain prices’

THE idea that the recent interest in biofuels is driving up grain prices has been refuted by European Agriculture Commissioner Mariann Fischer Boel.

Writing in her blog, she said this is not the case, and biofuels play a marginal role at most in the European Union context.

More significant by far have been low harvests in many regions of the world, bad weather in Europe and growing demand from East Asia.

Ms Fischer Boel said she has shown her willingness to act in this regard by suggesting a cut in the set-aside rate for next year.

The entire principle of set-aside will also be high on the agenda of the upcoming health check on the Common Agricultural Policy.

Noting that the rising price of food was one of the hottest topics over August, she said it was a situation no one would have imagined a year ago.

“The dairy sector has moved from a market under pressure to a situation where prices are surging.

“While this has a lot to do with circumstances beyond our control, I think it’s fair to say that it also reflects very positively on the reform process we kicked off in 2003,” she said

Ms Fischer Boel said recent price developments are no more and no less than the market in action, precisely what is wanted from European agriculture in 2007.

“If further proof were needed about our enhanced competitiveness, we only have to note how export subsidies for all dairy products have been set at zero since June.

“Our farmers are able to compete in the global marketplace without export assistance from the EU. That is good news indeed,” she said.