EU official says strategic food stocks not the way to tame food prices

Reuters / Increased production, not strategic foods stocks, is the most effective way to tame food prices, says a senior EU official.

Last month, French President Francois Hollande launched a global campaign to win support for creating strategic stockpiles of food commodities to keep a lid on food prices.

But it would be better to boost food production in the world’s poorest countries, said Andris Piebalgs, the EU development commissioner.

The French proposal, which was backed by the U.N’s Food and Agriculture Organization, did not specify how and where the food stockpiles would be developed. However, analysts have been skeptical about the idea as reserves are costly to run, particularly as grain has a shorter storage life than commodities like oil.

However, Piebalgs said the idea of using food crops for biofuels should be rethought.

“We believe that biofuels should be produced from food residues after crops have been used for providing foodstuff, then the remains can be transformed for second- and third-generation biofuels,” he said.

The EU Commission recently announced a major shift in biofuel policy, saying it plans to limit crop-based biofuels to five per cent of transport fuel.

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