At a time when food prices are skyrocketing worldwide with no signs of a climb-down in the near future, the rush for bio-fuels that had only recently gained momentum has become too controversial and, in fact, unwanted. The need for this kind of fuel became irresistible as the crude oil, which has already crossed $100, was becoming unbearably expensive and then this was also environment-friendly.

So, a consensus had emerged that it was high time to start reducing dependence on oil and avoid climate change effects. The way to do this was to use biological material to produce energy or, in other words, distil crops such as maize and sugar cane into ethanol, and transform crops such as palm oil, soya and canola into bio-diesel. In 2006, worldwide bio-fuel production had soared to 44 billion litres which included 38 billion litres of ethanol.

Because of its ever-growing appetite for energy, the rich world had already turned to alternate fuels in a massive way. Asia had, however, only recently shown enthusiasm for them. But how far it is worth pursuing in the light of fast-deteriorating food scenario needs rethinking. Britain’s new chief scientist, Prof John Beddington, said last week that cutting down rain-forests to produce bio-fuel crops was “profoundly stupid”. It was, he said, “very hard to imagine how we can see a world growing enough crops to produce renewable energy and, at the same time, meet the enormous increase in demand for food.”

Pakistan has not so far joined the race for bio-fuels for being under the influence of the oil companies but has been producing ethanol in large quantities for export purposes. Only last week, its bureaucracy had come to realise the importance of producing energy from ethanol and a meeting of officials and representatives of sugar industry was held at the Planning Commission office to explore the possibilities but no concrete decision could be taken.

Much in focus has been George Bush’s announcement last year that he would turn the US into a biofuels-growing nation to shed its dependence on petroleum imports from the countries which he described as “unreliable” and also “dominated by terrorists.” His polemics apart, it is more than manifest that crop-based fuels in the United States cannot replace oil and that it will have to continue to buy oil from the same countries for long. Even if the country’s entire corn and soya harvests were used to produce them, they would, at the most, satisfy only 12 per cent of the country’s current demand for petrol and six per cent of its need for diesel.

The situation in Europe is even worse. The UK, for example, cannot grow enough bio-fuels to run all its cars even if it puts the whole country under the plough. According to The New York Times, governments in Europe have begun rolling back subsidies for bio-fuels, mainly on grounds of poor environmental benefits which they say have often been overstated. They have also discovered how difficult it is to figure out whether a particular fuel has been produced in an environmentally friendly manner. Bio-fuels vary greatly in their environmental impact.

Several countries, including Australia, Britain, France, Germany, the Netherlands, Switzerland, as well as parts of Canada, are revising incentives for farmers, bio-fuel refiners and distributors. The manufacturers and sellers will now have to confirm their fuel’s net effect on the environment before being eligible for subsidies. Many European countries aim to have 5.75 per cent of their transportation fuel made from renewable sources by the end of the year.

The Netherlands has already decided not to subsidise any more the import of palm oil, its major source of green electricity generation, after investigators showed that the product was grown on Asian plantations created from drained peat land, with disastrous environmental consequences.

Economically speaking, bio-fuels are not viable. Most of the production programmes in the West rely heavily on subsidies, without which they would come to a grinding halt. A report from the Global Subsidies Initiative says that bio-fuels subsidies in the US alone currently amount to between $5.5 billion and $7.3 billion per year.

Subsidies provided by the US and the EU to their bio-fuels industries and growers are already spurring a fierce competition across the world between crops for food and crops for fuel, creating havoc in poor countries by raising food prices, and reducing global food reserves. If bio-fuels are to make even a small dent in the oil consumption of industrialised and industrialising countries, there will have to be a massive supply of them from plantations in the South. Reports point out that the bio-fuels agenda in the West and elsewhere is not being drafted by the policymakers who feel concerned over their countries’ dependence on crude oil or want to avert global warming and environmental destruction. The way this new industry is to be developed is already being determined by corporations and their political allies. Those in control are some of the most powerful companies in oil, automobile, food, biotechnology and global investment.

Companies such as Cargill and ADM control agricultural commodity production and trade in many parts of the world, and for them bio-fuels represent an opportunity for a major expansion of their business and profits. The biotech companies, such as Monsanto and Syngenta, are investing heavily to deliver crops and trees that fit the requirements of the bio-fuels processors. All of this will be achieved, of course, by means of genetic engineering.

For the petroleum companies – BP, Shell, Exxon, and so on – the bio-fuels craze offers a perfect opportunity to invest in this new energy commodity. For the automobile firms, these fuels are seen as the perfect pretext for escaping the pressure of the regulators to produce more efficient cars. Now all they would have to do is make them bio-compatible. And the investment companies have lots of spare cash to help finance the make-over. It is this combine of corporate power that has seized the campaign originally meant to provide relief to the people in certain respects.

Monsanto and Cargill are working together to produce new, genetically engineered varieties of maize that can supply both the bio-fuels and the animal feed markets. British Petroleum has linked up with Dupont to create “bio-butanol”, mixing bio-fuels with petroleum, to the benefit of both companies. The result is a massive expansion of global industrial agriculture.

Within less than two years, a multi-billion-dollar bio-fuel industry has developed in Malaysia and Indonesia, using the world’s highest-yielding feedstock – palm oil. Their governments, supported by international investment, have drawn up a blueprint for converting large areas of their countries into mega-plantations to grow fuel for richer nations’ cars.