Biofuels are responsible for 30 percent of the increase in global food prices, pushing 30 million people worldwide into poverty, aid agency Oxfam said in a report on Wednesday.
The use of biofuels is soaring as developed countries try to reduce their dependence on imported oil and cut emissions of carbon dioxide, but critics say they have led to a shortage of grain, pushing up commodity prices.
"Rich countries' demands for more biofuels in their transport fuels are causing spiralling production and food inflation," said Oxfam biofuel policy adviser Rob Bailey, who wrote the report. "Grain reserves are now at an all-time low."
Oxfam called on rich countries to dismantle subsidies for biofuels and reduce import tariffs.
"Rich countries spent up to $15 billion (7.6 billion pounds) last year supporting biofuels while blocking cheaper Brazilian ethanol, which is far less damaging for global food security," the report said.
The aid agency also urged rich countries to scrap biofuels targets, including European Union plans to get 10 percent of its transport fuel from renewable sources like biofuels by 2020.
The EU plans strict criteria to ensure biofuels do not do more harm than good. Some member states want targets to be conditional on the commercial availability of second-generation biofuels from farm waste, timber waste and domestic waste.
Oxfam estimates that by 2020, CO2 emissions from land-use change in the palm oil sector may have reached over 3.1 billion tonnes, largely as a result of the EU target - and it would take over 46 years of biofuel use at 2020 levels to repay this "carbon debt".
"Biofuels are taking over agricultural land and forcing farming to expand into lands that are important carbon sinks, like forests and wetlands," the report said. "This triggers the release of carbon from soil and vegetation that will take decades to repay."
