Washington, India has demanded an immediate stop to diversion of food crops, particularly corn in the United States, for producing biofuels to check a rise in food prices in the short term.

"The long term solution to this problem is to increase the supply of food grains; immediately, however, we should avoid wastage and diversion of food to fuel," Indian Finance Minister P. Chidambaram told a meeting of world financial leaders here Sunday.

Seeking a "renewed thrust to public investment in agriculture with policies designed to boost private investment as well, he said: "We need technological breakthroughs to ensure that growth in crop-yields does not taper off but gives rise to a new green revolution."

"We also need urgent action in the US and Europe for rationalizing the biofuels policy," Chidambaram said in a statement read out at the Development Committee of the World Bank and the International Monetary Fund (IMF) at its annual meeting here.

"Biofuels derived from non-food crops or biofuels produced from crops that do not compete with food production may be an appropriate and climate-friendly response to the rapid increase in global oil prices. But biofuels produced from food grains such as corn and oil seeds cannot be justified under any circumstances," Chidambaram said.

Noting "in the US, use of corn for ethanol has consumed more than 75 percent of the increase in global corn production over the past three years", he said: "This trend must be reversed".

Facing higher levels of inflation once again after a decade of moderate price rises, Chidambaram said developing countries have adopted alternative approaches ranging from social safety nets to shield the most vulnerable sections to more harsh measures like export taxes and bans.

"We do realise that such policies may not be welfare-enhancing. However, given the limited options and instruments many of us have, we have been compelled to take recourse to such measures to manage our domestic stocks better," he said.

Stressing the importance of effective state institutions in raising investment in agriculture and in supporting social safety nets, Chidambaram hoped that the Bank will be at the forefront in this activity as a part of its response to the food price crisis.

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