Rick Wagoner, General Motors’ chairman and chief executive, has dismissed United Nations research that links biofuel production to rising food prices as “shockingly misinformed”.
The blunt assessment by the head of the world’s largest car company reinvigorates intense debate about ostensible social costs and environmental benefits of biofuels, a burgeoning industry some analysts say crowds out food production.
“If you look at what’s causing higher [bio]fuel prices, the cost of corn is a very small part of that,” Mr Wagoner said at a trade show in China.
The UN’s Food and Agriculture Organisation has linked biofuels production – alongside factors such as crop failures and the falling dollar – to the spike in world food prices. The agency has ordered research on the subject in advance of a summit on world food security intended to take place in Rome from June 3-5.
But Mr Wagoner said: “Oil prices are a far bigger driver of higher food prices than ethanol.”
While the European Union has mandated 10 per cent use of biofuels by 2020, the issue increasingly splits political opinion. Angela Merkel, the German chancellor, last week attributed rising food prices to bad agricultural policies and changing eating habits in the developing world rather than biofuels, but Gordon Brown, the UK prime minister has expressed concern about their effect on the food supply.
It also frays car industry nerves. Many manufacturers are developing vehicles to run on ethanol or biodiesel and some invest in companies that produce those. GM produces about a million “flex fuel” vehicles in the US each year. Its European Saab brand has several models able to use biofuels.
Mr Wagoner dismissed as “simply misinformed” reports biofuels production was pushing up tortilla prices in Mexico. But he supports production of “cellulosic” ethanol from non-food items.