By David Clarke

TOYAKO, Japan, July 7 (Reuters) - A British government report on food policy to be published on Monday says the link between demand for biofuels and rising world food prices needs to be more closely examined.

The European Union's proposal to get 10 percent of road transport fuels from renewable sources, such as biofuels, by 2020 has faced growing criticism.

Biofuels are mainly produced from food crops such as wheat, maize, sugar cane and vegetable oils and are seen as a way to cut greenhouse gas emissions that contribute to climate change.

But critics say diverting land from food crops to produce biofuels has helped push up global food prices and in some cases has led to the destruction of rain forests.

Alongside the government's food report, Britain will also publish a document on Monday known as the Gallagher review which examines the environmental case for biofuels and the impact of 2020 targets on food prices, according to a government briefing.

Prime Minister Gordon Brown said in April that Britain would push for changes in EU targets if the review showed more biofuel production was boosting food prices and harming the environment.

European Union energy chiefs also backed away from the controversial 2020 targets when they met in Paris on Saturday, saying there were other renewable sources besides biofuels which could power road transport.

The rush to grow crops for energy rather than food has pushed global food prices up by 75 percent, according to a confidential World Bank report published in Britain's The Guardian newspaper last week.

BROWN'S G8 FOOD PUSH

"There is so much evidence about the negative impacts of biofuels that setting mandatory targets seems unconscionable," said Phil Bloomer from campaign group Oxfam.

"And yet that's what the UK has done, thereby sending a signal to the markets and the private sector that demand is here to stay, and keeping prices high. The EU must not follow suit."

At the moment, Britain requires suppliers of motor fuels to ensure 5 percent comes from renewable sources by 2010.

Brown has been calling for global action to curb soaring food prices for several months and outlined his ideas in a letter in April to Japanese Prime Minister Yasuo Fukuda, who hosts this week's G8 summit.

As part of his plan, Brown wants the G8 to set new benchmarks for sustainable levels of biofuel production, according to the briefing.

He is also calling for a new expert food panel -- modelled on the panel of climate change scientists which shared the 2007 Nobel peace prize -- to track global food supplies and sound the alarm early when crises loom.

Britain's food report says boosting agriculture in the developing world to its potential would help meet mushrooming demand and decrease the risk of social instability. Stopping food waste during storage and transport would also help.

Brown wants rich nations to stop a fall in aid and investment in agriculture in the developing world, double spending on research, train scientists and experts in poor nations and invest in irrigation and transport. (Editing by Caroline Drees)

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