A U.N. agency on Tuesday called for an urgent review of agriculture and biofuel subsidies and trade barriers, saying their removal would increase opportunities for developing countries to take advantage of rising biofuel demand.

The Food and Agriculture Organization said in a newly released report that keeping the trade barriers may prolong and deepen the food crisis.

"Current policies tend to favor producers in some developed countries over producers in most developing countries," FAO Director-General Jacques Diouf said. "The challenge is to reduce or manage the risks while sharing the opportunities more widely."

Growing demand for biofuels, which are made from crops such as sugar cane and corn, will contribute to food price increases, but can also promote rural development in poor countries _ provided that small farmers gain access to markets and receive support to boost their production.

The Rome-based agency also said in its yearly report that biofuels, although environmentally friendly, will not necessarily contribute as much as previously thought to reducing greenhouse gas emissions.

Their impact depends on how and where biofuels are produced and brought to the market, it said.

Diouf said the transition to second-generation biofuels, which hold promise for reducing gas emissions, should be sped up. Such biofuels, using wood, tall grasses, forestry and crop residues, are being developed but are not commercially available.

The U.N. has called on the international community to issue guidelines to ensure biofuel crops do not compete with food crops and do not encourage deforestation.

Biofuel production based on agricultural commodities, which more than tripled from 2000 to 2007, covers nearly 2 percent of the world's consumption of transport fuels, the agency said. While the growth is projected to continue, the contribution of liquid biofuels _ mostly ethanol and biodiesel _ to transport energy will remain limited, it said.

Diouf said it was too early to assess the impact of the current financial crisis on developing countries and humanitarian agencies, but he expressed "great concern" that a recession would shift governments' priorities on food aid.