Business | Economy
ADB seeks removal of biofuel subsidies
Developed nations should stop paying agricultural subsidies to encourage biofuel production because the payments are making staple foods more expensive, the Asian Development Bank (ADB) said on Monday.
- AP
- Published: 23:39 April 21, 2008
Singapore: Developed nations should stop paying agricultural subsidies to encourage biofuel production because the payments are making staple foods more expensive, the Asian Development Bank (ADB) said on Monday.
Biofuels should also be re-examined by governments around the world as it is increasingly unclear how environmentally friendly they are, said ADB Managing Director General Rajat Nag.
The production of biofuel leads to forests being destroyed and reduced land area for growing crops for food, he said.
"We feel that the developed countries should seriously rethink the whole issue of biofuel, particularly the biofuel subsidies," Nag said. "Giving subsidies for biofuels ... basically acts as an implicit tax on staple foods."
Paying farmers to grow oilseed and other crops to produce biofuels means they grow fewer food crops, resulting in higher prices.
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