Biofuel farming accused of driving up food prices

Biofuels were supposed to make up a big part of the answer to two of the great challenges of our age, climate change and energy security.

To many governments grappling with soaring oil prices and growing fears about climate change, tailoring incentives to engineer a switch from oil-based fuels to those made from food seemed like a good idea.

But increasingly, there are fears that biofuels may be creating as many problems as they solve.

Oxfam says the renewable fuels are not as climate-friendly as first thought.

The international aid agency blames the biofuel policies of developed countries for a 30 per cent spike in food prices which are dragging more than 30 million extra people into poverty.

"As more science has come to light and as people have looked at this issue more carefully, I think our conclusion is that changing to biofuels in transport in countries like Australia, Europe, America is not good for the planet," says Oxfam Australia's Jeff Atkinson.