"The energy security, environmental and economic benefits of biofuels production based on agricultural commodity feed stocks are at best modest, and sometimes even negative," says the report, prepared by the Food and Agriculture Organization of the United Nations and the Organization for Economic Cooperation and Development. "Alternative approaches may be considered that offer potentially greater benefits with less of the unintended market impact."
The Agriculture Department's own longtime chief economist, Keith Collins, who retired in January, said that ethanol was the "foot on the accelerator" of corn demand - an essential feed for animals, as well as a part of many diets - and merited renewed debate. He said Congressional mandates for ethanol would require farmers to grow more corn for conversion to biofuel, at the expense of feed corn and other food crops.
"You're building in tremendous increase in demand," said Mr. Collins, who emphasized that he was not necessarily against ethanol. "It's an increase that is going to feed into food prices."
The United Nations report, the global agriculture outlook through 2017, said prices for farm crops will remain substantially higher over the next decade because of fundamental changes in demand, though they will gradually decline from current highs.
Because the recent spike in crop and food prices has been caused in part by temporary factors like drought, the report predicted that prices should decrease as weather conditions return to normal and crop yields improve.
