World Bank calls for relaxation of biofuel blend laws

The World Bank has called for the relaxation of laws requiring crops to be blended into petrol, saying that they are contributing to the global food price crisis.

Robert Zoellick, the President of the Bank, said that a "toxic brew" of higher food and fuel costs was heightening popular unrest in regions such as the Middle East and North Africa and condemning millions more people to poverty.

Among the many causes of high food prices are rules in countries, such as the United States, that require a certain percentage of petrol to come from corn-based ethanol. Some 31 per cent of the corn produced in the US in 2008 was turned into ethanol, and government forecasts show that this will hit 40 per cent this year.

Hassan Zaman, a World Bank economist, said that although the Bank was not advocating the abolition of these laws, it believes that they should be relaxed when food prices surge beyond certain thresholds.