Rising food prices may derail biofuels policyFinance ministers from the world over, who gathered in Washington recently to discuss the financial crisis, also debated the food shortages which have arisen as a result of surging commodity prices. There have been riots in response to soaring food prices in Haiti, Ethiopia, Cameroon, Ivory Coast and Senegal. Nearer home in Pakistan, army troops have been deployed to prevent food theft from warehouses and fields. Finance minister Palaniappan Chidambaram, who was also in Washington to attend the meeting of the World Bank, lent his voice to the outcry against US policies pushing corn-based ethanol and other biofuels as one of the causes of the crisis. Using unusually sharp language for a multilateral forum, he said, "When millions of people are going hungry, it's a crime against humanity that food should be diverted to biofuels."Chidambaram's diatribe attracted flak from finance ministers of countries, which are diverting food crops for biofuels production. But it also put a question mark over the proposed National Biofuel Policy, which is being vetted by a group of ministers (GoM). The National Biofuel Policy is expected to balance the interests of primary producers, processors and consumers.The GoM, headed by agriculture minister Sharad Pawar, was expected to resolve issues related to the creation of a national biofuel board, taxation and designating the nodal ministry for the biofuels sector. The draft policy proposed two separate guidelines for bioethanol and biodiesel segments. The government has already allowed 5 per cent ethanol blending with petrol though it is not mandatory, while 10 per cent ethanol blending would be made effective from October. The draft accorded high priority to produce biodiesel from non-edible oil seeds like jatropha. The figure being touted around for developing land for biofuels crop is 12 million hectares by 2017.A hard lookThe Prime Minister's Office too wants a hard look at the biofuel policy option. It feels that large-scale diversion of land for crops for hybrid fuels could send wrong signals when concerns over inflation and food management have come to the fore.The pmo, according to sources, had taken a fairly conservative view of biofuels option as India's food requirements are only growing. India has, over the years, become a net importer of food and, until its domestic production is ramped up, it makes little sense to reduce the area under food crop production.Prime Minister, on his part, has been sharing his views on the global food shortages with world leaders. He brought up the issue at the Asean conclave retreat last year. His argument that food management would be a challenge in the coming days is finding resonance at multilateral fora. Sources say that Chidambaram would not have used such strong words, unless he was in consonance with the pm.The development means bad tidings for the ministry of non-conventional energy sources, headed by Vilas Muttemwar which, along with the Biofuel Association of India, was pushing for early adoption of the policy. Mut-temwar's pitch was that alternative clean energy technologies like biofuels could bridge the gap between the demand and supply of energy and reduce the import dependence on fossil oil. He said that energy security was necessary for the country for maintaining its sustained economic growth rate of 8-9 per cent and, therefore, the demand for energy was likely to increase four-fold.bai had been lobbying for setting up the Biofuel Board, arguing that it would provide stability to the biodiesel market. According to bai president Sandeep Chaturvedi's projections, sales primarily in the form of low level biodiesel blends, will exceed 50 lakh kilolitres per year. "We have proposed an independent committee to decide on pricing. We want biodiesel pricing realistic," Chaturvedi said, adding that the government has fixed the rate at Rs26.50alitre.bai has urged the government to make 5 per cent blending of biodiesel mandatory in the policy. It has demanded that the government should implement 30 per cent subsidy on jatropha plantation as the biodiesel manufacturers currently face serious shortage of raw materials. The association has also sought policy initiatives by government and support from private organisations to drive the biodiesel projects in different sectors.