By Nigel Hunt, Reuters, January 5, 2008

Rising production of biofuels has distorted government budgets, helped to drive up food prices and led to deforestation in south-east Asia, the chief scientist of Britain's farm ministry said on Friday.

"The way we are currently producing biofuels is not the way to go," former World Bank chief scientist Robert Watson said, citing the U.S. ethanol program and German support for biodiesel as among the least cost effective.

Watson told the Oxford Farming Conference that biofuels production from sugar cane in Brazil may be one of the only sustainable current methods.

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