April 10 (Bloomberg) -- Prime Minister Gordon Brown said the U.K. government is concerned that biofuels are stimulating inflation and pushing up food prices around the world.

Brown, in a letter to leaders of the Group of Eight nations, urged countries to study the impact of using the fuels made from crops including corn and soybeans. The U.S. and other nations are encouraging the fuels such as ethanol to be added to gasoline as a way of reducing damage to the environment.

The price of rice, the staple food for half the world, has doubled in the past year to an all-time high. Global food prices increased 57 percent last month from a year earlier, according to the United Nations Food and Agriculture Organization. Countries including Indonesia and Egypt have seen unrest over high prices.

``We need urgently to examine the impact on food prices of different kinds and production methods of biofuels and ensure that their use is responsible and sustainable,'' Brown wrote, according to a text of the letter released by his office in London. ``Rising food prices threaten to roll back progress we have made in recent years on development.''

Demand for biofuels, along with increased competition for cropland between food and fuel uses, is taking up much of the increase in the global crop production, according to a World Bank report. Food production is failing to keep up with demand, the bank said on April 9.

EU Resistance

The European Commission, the executive arm of the European Union, may resist Brown's request. It argues that food prices are rising because of stronger demand in Asia, bad weather that hurt crops and export curbs in Russia and Ukraine.

``The reasons for the price increases at the global level are numerous, but the impact of biofuels is not significant,'' commission President Jose Barroso told reporters yesterday in Brussels. ``We have, above all, structural reasons.''

The 27-nation EU aims to boost the share of biofuels in the region's transport fuel to 10 percent by 2020 from a planned 5.75 percent in 2010, part of a push to reduce reliance on fossil fuels that contribute to global warming.

``The alternative to biofuels for transport is oil, which has a very negative impact with respect to climate change,'' Barroso said. ``We are for sustainable biofuels.''

Brown's View

Brown's letter is part of push by Britain for an international response to turmoil in credit markets that raised up borrowing costs around the world.

The G-8 is led this year by Japanese Prime Minister Yasuo Fukuda, who faces his own problems with consumers complaining about rising food and oil prices. G-8 leaders will meet in Japan beginning on July 9. G-7 finance ministers meet this weekend in Washington.

In recent weeks, Brown also has called on the International Monetary Fund and G-7 nations to improve oversight of banks and to coordinate efforts to provide liquidity to markets. He also wants to step up efforts to negotiate a world trade agreement.

Britain, the U.S., Germany, France, Italy, Canada, Japan and Russia belong to the G-8. Brown also is sending the letter to United Nations Secretary-General Ban Ki-moon, IMF Director General Dominique Strauss-Kahn and Robert Zoellick, president of the World Bank.

To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net.

Last Updated: April 10, 2008 06:01 EDT