Let's not make the solution worse than the problem

One of the developing themes of the World Economic Forum in Sharm El Sheikh is food scarcity and the affect that rising prices has on developing nations.

It is not surprising that this debate is taking place in Egypt, where three people died last month during food riots. Fights have broken out in queues to buy subsidised bread and the government has increased public sector salaries by 30 per cent to enable families to buy their groceries.

As with any global problem, there are many causes of rising food prices but one in particular has caught the attention of the politicians and business leaders at the WEF.

President Hosni Mubarak of Egypt spelled it out on Sunday: "Is it logical or even acceptable that agricultural crops are used to produce ethanol, leading to a worse crisis in food prices?" Mubarak's words were clearly directed at his fellow speaker that day, the president of the United States. However, Brazil also has a policy of developing crops as fuel rather than for consumption.

Prince Andrew, the Duke of York and second son of The Queen, told delegates at the WEF: "We need to be more careful in food production and mindful that there are things we can do that harm production. For example, Brazil is displacing livestock into the rainforest, and that means the rainforest is coming down, and that means less rain on the plains so they are not able to produce bioethanol. It's a balance we have to think very carefully about."

There are unlikely to be food riots in the GCC any time soon but that does not mean the region will be unaffected by cost increases. The Indian workers building UAE's infrastructure, for example, have begun lobbying for higher salaries to offset the weakening US dollar and to compensate for the higher food costs their families are paying back home. That could lead to cost increases for everything from apartments to new roads.

Clearly a balance is needed between developing alternative fuels and the need to feed the world affordably.

Yuriko Koike, a member of the Japanese house of representatives, told the WEF: "Burning corn and sugarcane is violating the food. It is important that we formulate international rules that cover the way governments develop biofuels. We should do this urgently to make the distinction between food and energy crops."

First there was a mad rush into biofuels because governments were responding to climate change hysteria and now we have calls to deal with rising food prices. Let us hope that this time around, we do not make the solution worse than the problem.

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