In the latest edition of its annual publication 'The State of Food and Agriculture (SOFA) 2008', the UN Food and Agriculture Organisation states that government policies have created an artificially rapid growth in biofuel production - the social, economic and environmental costs of which need to be reviewed.
Biofuel production based on agricultural commodities increased more than threefold from 2000 to 2007 and has been widely blamed for the staggering recent increases in animal feed prices.
The report points out that the high agricultural commodity prices resulting from biofuel production are already having a negative impact on global food security.
"Decisions about biofuels should take into consideration the food security situation but also the availability of land and water," said FAO director general Jacques Diouf.
"All efforts should aim at preserving the utmost goal of freeing humanity from the scourge of hunger."
The report adds that biofuels have a limited importance in terms of global energy supply and are not necessarily positive for the environment.
"Expanded use and production of biofuels will not necessarily contribute as much to reducing greenhouse gas emissions as was previously assumed," it says.
Biofuel production is driving large scale land-use change in countries such as Brazil, which could have serious environmental consequences.
"Changes in land use - for example deforestation to meet growing demand for agricultural products - are a great threat to land quality, biodiversity, and greenhouse gas emissions," said Diouf.