Biofuels are doing more harm than good, the United Nations' Food and Agriculture Organisation said yesterday, in its strongest call yet to review "current policies supporting, subsidising and mandating biofuel production and use". The FAO said the production of biofuels from agricultural commodities such as corn and soyabean was leading to "continued upward pressure" on the price of food. "While biofuels will offset only a modest share of fossil energy use over the next decade, they will have much bigger impacts on agriculture and food security," it said in its annual report, The State of Food and Agriculture 2008. The FAO said that the production of some biofuels resulted in higher greenhouse emissions than the consumption of fossil fuels, weakening one of the key motivations behind the support for crop-based fuels. The plea to change biofuel subsidies and blending mandates is a significant departure from the Rome-based agency's previous - and simpler - analysis that they presented both opportunities and challenges. It also comes as some European countries start to scale back plans to increase biofuels blending into fossil fuels as consumers worry about surging food prices. Global wholesale food prices have risen 60 per cent since 2006. The food versus fuel debate dominated the FAO's summit last June, where countries only agreed that more studies were needed about the impact of biofuel production on agricultural commodities prices. Jacques Diouf, director-general of the FAO, yesterday said the agency's view was that decisions about -biofuels should take into consideration food security and land and water availability. "All efforts should aim at preserving the utmost goal of freeing humanity from the scourge of hunger," he said. The FAO forecast global biofuel output, dominated by the US and Brazil, would hit 127bn litres by 2017 - more than double last year's production. The surge would require the consumption of more corn and sugar, whose prices will be 26 per cent and 11 per cent higher. "The emergence of biofuels as a new and significant source of demand for some agricultural commodities . . .contributes to higher prices for agricultural commodities in general, and for the resources used to produce them," the report said. The report did not quantify the impact of biofuel production on the increase in food prices from 2006. However, Donald Mitchell, an agricultural economist at the World Bank, estimated an impact of 75 per cent, while the US department of agriculture suggested it was just 3 per cent. Other institutions have pointed to about 30 per cent. The new study also evaded assessing the impact of higher biofuel production on oil prices. The International Energy Agency, the energy watchdog, has said oil prices will be higher without the growing biofuels supply. Copyright The Financial Times Limited 2008