'As citizens of the world, we ought to be concerned about the foolishness of growing food and diverting it into fuel.' -- REUTERS

While growing demand is one reason for skyrocketing food prices, the use of agricultural products to make biofuels is the other cause, he told a public lecture organised by the Lee Kuan Yew School Public Policy in Singapore.

'It has been estimated that nearly 20 percent of corn grown in the United States is diverted for producing biofuels,' he said in his speech to academics, students and diplomats.

'As citizens of the world, we ought to be concerned about the foolishness of growing food and diverting it into fuel.'

Mr Chidambaram said it is a 'sign of the lopsided priorities of certain countries' that they produce fuel at a cheaper cost to meet the transport needs of a certain section of their population even if it leads to higher food prices worldwide.

The price of many food commodities has soared worldwide to record levels over the last year due to booming demand in fast-growing Asian countries as well as the increased use of biofuels.

Present-generation biofuels are derived from food crops such as corn, sugar cane and soybeans.

Biofuels were initially viewed as an environmentally-friendly alternative with no geopolitical risk compared with dirty fossil fuels, but they are now under attack as some unintended consequences emerge.

Speaking at a forum after his speech, the Indian finance minister said countries that produce large quantities of food should sell it to the rest of the world at reasonable prices.

'But a very insular selfish approach encourages them to convert food into fuel. I think it is the most foolish thing that humanity can do,' he said.

'I'm deeply distressed that people can convert food to fuel. There are non-food items that can be produced to make biofuels... To convert corn to fuel... I think it's outrageous and it must be condemned.' -- AFP