Biofuels push the prices of food products up

German brewers are about to increase their prices, because the price of barley, which is used to make beer, has doubled (400 euros per tonne). The reason for this increase is a combination of two factors:

> The 2006 harvest produced less than forecasts;
> Major competition from biofuels, produced from crops that are being grown on ever-expanding areas.

After the incident in Mexico at the beginning of the year, when the price of tortillas quadrupled, it is Germany’s turn to take center stage regarding tensions between food security and energy independence. In fact, the problem of energy supply is the main fragility in the leading European economic power. As Germany is extremely dependent on the outside market and has decided to abandon nuclear energy by 2021, it must diversify its supplies and has chosen to develop sustainable energy, particularly biofuels.

This energy policy has therefore incited farmers to abandon certain crops that are not sufficiently lucrative, such as barley, and to move towards biofuel production. Today, 16% of German farmland is used for biofuels.

But beer will probably not be the only agricultural product intended for human consumption to suffer as a result of the competition with products grown for energy purposes: the price of bread could soon rise by 10% according to the Director of the German Federation of Bakers.

Although biofuels have interesting prospects for farmers and provide a possible means to fight pollution, the problem of competition with food products is far from solved. Consequently the creation of a Rating Agency capable of helping international decision-makers to mediate between different uses of agricultural products is again totally justifiable.