For environmental groups like Friends of the Earth, it's a no brainer. "If you start to fuel cars with crops," says Ed Matthew, "you are instantly putting the world's one billion starving people in competition with the world's one billion motorists. It's as simple as that."

Green groups and aid agencies cite biofuels as forming part of the "perfect storm" of poor harvests, rising oil prices and a surge in demand for food from China and India that are all pushing up the price of everything from pasta to a loaf of bread.

In fact, the first flashpoint in the food versus fuel conflict has already happened. Mexican anger at more expensive corn flour led to the so called "tortilla riots" at the beginning of the year. The price rises were attributed to the United States' large-scale switch from food to fuel production, meaning less maize exported to its southern neighbour.

The UN special rapporteur on the right to food, Jean Ziegler, said he feared biofuels would bring more hunger. The growth in the production of biofuels has helped to push the price of some crops to record levels. He complained of an ill-conceived dash to convert foodstuffs such as maize and sugar into fuel, which created a recipe for disaster.

IT WAS, HE SAID, A CRIME AGAINST HUMANITY TO DIVERT ARABLE LAND TO THE PRODUCTION OF CROPS WHICH ARE THEN BURNED FOR FUEL. He called for a five-year ban on the practice. Within that time, according to Mr Ziegler, technological advances would enable the use of agricultural waste, such as corn cobs and banana leaves, rather than crops themselves to produce fuel.

The growth in the production of biofuels has been driven, in part, by the desire to find less environmentally-damaging alternatives to oil. The United States is also keen to reduce its reliance on oil imported from politically unstable regions.

But the trend has contributed to A SHARP RISE IN FOOD PRICES as farmers, particularly in the US, switch production from wheat and soya to corn, which is then turned into ethanol. Mr Ziegler is not alone in warning of the problem. The IMF last week voiced concern that the increasing global reliance on grain as a source of fuel could have serious implications for the world's poor.

On the London Bullion Market, gold prices surged as high as 778.50 dollars per ounce, which was last seen in January 1980. In early European trade, the euro struck 1.4375 dollars -- the highest level since the single currency's creation in 1999.

Gold benefits from a weak US unit because it makes commodities that are priced in dollars cheaper for buyers using stronger currencies. Meanwhile, the price of New York crude surged past 92 dollars per barrel for the first time, lifted by rising tensions in the oil-rich Middle East and new US sanctions against Iran, dealers said.

Higher oil prices spark inflationary concerns, while gold is regarded as a haven in troubled times.

"We are still negative on the dollar. We bought stocks in companies that are earning their money in other currencies," he told reporters during a visit to Berkshire's Korean cutting tool maker subsidiary, TaeguTec.

Buffett, worth $52 billion according to Forbes magazine in March, said his Berkshire Hathaway company is still on the hunt for bargains as the U.S. subprime mortgage crisis plays out.

International Monetary Fund Managing Director Rodrigo Rato said on Monday the U.S. currency was still overvalued and that there was room for further depreciation.

More than a million people were evacuated and, for some, the threat to their homes has not yet passed. The number of properties destroyed had risen to nearly 1,600 by Thursday, the governor of California's office said.

While, in the Los Angeles area, many wildfires were almost out, in Orange and San Diego counties firefighters were still battling to get on top of the flames. Evacuation orders were still being issued and 16,000 homes were in the path of two wildfires that were still out of control, fire officials told the Associated Press.

The programme will go further than experts recommended, with all 12 to 13-year-olds eligible for the jab and a catch-up campaign up to the age of 18.

Earlier this year the Joint Committee on Vaccination and Immunisation recommended routine vaccination for 11 to 12-year olds, including the possibility of a catch-up campaign - but only up to the age of 16. But the government wanted further evidence on the cost benefits of a programme before making a final decision.

Two vaccines have been developed - Gardasil, made by Merck and Sanofi Pasteur, which has been approved in 76 countries, and Cevarix, which is expected to be launched in Europe later this year. Both cost about £300 for three injections over six months.

Some have expressed concerns that providing a jab to protect against a sexually transmitted infection to children at a young age might encourage promiscuity, BUT PARENTS WOULD HAVE THE FINAL SAY AS TO WHETHER THEIR CHILD RECEIVED THE INJECTION.

About 80% of sexually active women can expect to have an HPV (human papilloma virus) infection at some point in their lives. It is held responsible for some 70% of cervical cancer cases, a disease which kills 274,000 women worldwide every year, including 1,120 in the UK.

In an editorial published last year, the Lancet called for mandatory vaccination against HPV for girls in all EU member states once they are 11 or 12. Other European countries including Switzerland, Austria, Germany, Italy, France, Norway, Luxembourg and Belgium have approved a vaccination programme. Experts said the programme would be more expensive than all other childhood immunisations and the benefits would not been seen for decades, but eventually it would be worth the cost.

MERRILL LYNCH has just confessed to a $7.9bn write down on CDO subprime debt and assorted follies, nearly double what it suggested three weeks ago. This is what happens when a bank values its CDO debt at "mark-to-market" rather than "mark-to-myth", as some of Merrill's rivals are still trying to do. Merrill's Q3 loss of $3.5bn has cut the group's equity capital by a fifth. This has consequences. The bank's lending multiples will have to shrink.

IN BRITAIN, we have had the first bank run since the City of Glasgow Bank collapsed in 1878. The Fed has cut the interest rates a half point and vastly increased the pool of eligible collateral for Discount operations. The European Central Bank has injected over €400bn of liquidity in the biggest intervention since the euro was created. The US dollar has fallen below parity with the Canadian Loonie for the first time since 1976, and to all-time lows on the global dollar index.

All it will take now for a full-fledged rout is a move by the SAUDI AND GULF STATES TO BREAK THEIR DOLLAR PEGS, which they may have to do to prevent imported US inflation causing havoc; or for the ASIAN BANKS TO STOP BUYING US TREASURIES - as Vietnam, Singapore, Korea, and Taiwan, have gingerly begun to do.

And for good measure, THE BANK OF ENGLAND has just warned in its Financial Stability Report that lenders are still in serious trouble, that there is a risk of commercial property crash, and that equities are "particularly vulnerable" to a downturn. It is said there may well be a repeat of the summer crisis, "potentially on an even larger scale."

What more do you want?

WOE BETIDE WALL STREET if the Fed fails to slash rates dramatically over the Winter, starting on October 31.

WOE BETIDE THE DOLLAR IF IT DOES.

Cannabis was the most common substance taken with more than 1.3 million 16-to 24-year-olds smoking it. Cocaine was taken by 375,000 young adults - slightly up on the previous year's total and equivalent to more than six per cent of the under-24 age group. The figures, drawn from the Home Office's British Crime Survey, cover the year ending in March.

They also show that the percentage of those aged between 16 and 59 who took at least one illegal substance fell from 10.5 per cent the year before to 10 per cent. Prime Minister Gordon Brown recently ordered a review of the classification of cannabis, which is expected to revert to class B status.

A separate Home Office report also published today shows that drug seizures have risen sharply. Figures for 2005 reveal a 50 per cent increase in the number of seizures which brought in 69 tonnes of cannabis, 3.8 tonnes of cocaine, 1.9 tonnes of heroin and two tonnes of amphetamines.

The Santiago Fire in Orange County was started in two places along a little-traveled road, according to Chief Chip Prather of the county's fire authority. The fire, which has burned more than 25,000 acres, was started in brush just off Santiago Canyon Road, not close to homes. It spread rapidly, indicating the arsonist had some knowledge of winds and other factors.

"It is a confirmed arson. There was evidence found at the scene. That is the purpose of our early declaration of it being an arson-caused fire," Prather said. He would not describe the evidence. The Santiago Fire's points of origin are considered crime scenes, said Jim Amornino, a spokesman for the Orange County Sheriff's Department.

The reward for information leading to an arrest has increased to $150,000 -- $50,000 each from the governor's office, the U.S. agency of Alcohol, Tobacco, Firearms and Explosives, and the FBI, Prather said. The state established a toll-free arson tip line at 800-540-7085. Gov. Arnold Schwarzenegger said anyone convicted of arson would be dealt with harshly.

Inventories last week fell 5.29 million barrels to the lowest since January, the U.S. Energy Department said. New U.S. sanctions against Iran, warnings of a Turkish assault on Kurdish militants in Iraq and a falling dollar helped push prices higher. Brent futures in London reached a record.

Crude oil for December delivery rose as much as 64 cents, or 0.7 percent, to $91.10 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest since trading began in 1983. It traded at $91.02 at 12:20 p.m. Singapore time. Prices are 51 percent higher than a year ago.

The Organization of Petroleum Exporting Countries, supplier of about 40 percent of the world's oil, doesn't plan additional output even with record oil prices, Venezuelan Energy Minister Rafael Ramirez told reporters in Caracas yesterday. "There is enough oil in the market," Ramirez said. OPEC is "'not planning to increase production."

Latest - Friday P.M.:- Crude oil prices spiked above $92 in Asia Friday on growing tensions in the Middle East and renewed concern about oil supplies. The United States announced new sanctions against Iran Thursday, targeting the elite Revolutionary Guards, which Washington accused of backing Shiite militants in Iraq. A confrontation between the world's largest oil consumer and its fourth largest oil producer could upend markets.

The appeal for peace, made public by the Catholic lay Community of Sant'Egidio, was presented to the leaders at the concluding ceremony of the 21st International Encounter of Peoples and Religions held in Naples from Sunday through Tuesday. The encounter brought together 315 religious leaders of various creeds.

The peace appeal stated: "From Naples we can say, stronger than before, that anyone who uses the name of God to hate the other, to practice violence, or to wage war, is cursing the name of God. As Benedict XVI told us, 'Never can evil and violence be justified by invoking the name of God.' We need the strength that comes from the spirit of love, which helps rebuild and mend the unity of humankind."

The appeal urged a spirit of dialogue among all peoples and religions: "In the depths of our religious traditions, we have discovered that a world without dialogue is a world without hope, where people are fated to fear each other. Dialogue does not cancel differences. Dialogue enriches life and dispels pessimism that makes one see the other as a threat. DIALOGUE IS NOT THE ILLUSION OF THE WEAK, IT IS THE WISDOM OF THE STRONG.

"We commit ourselves to learn the art of living together and to offer it to our fellow believers. There is no alternative to the unity of the human family. We need brave builders, in all cultures, and in all religious traditions. We need the globalization of the spirit, which reveals to us what we no longer see: the beauty of life and of the other, in all circumstances, even the hardest."

Andrea Riccardi, founder of the Sant'Egidio Community, which co-sponsored the event together with the Archdiocese of Naples, announced that the next encounter will be in Cyprus. "This island represents a frontier that can become a bridge of dialogue and peace," he said.

Orthodox Archbishop Chrysostomos II of New Justiniana and All Cyprus said that in his community, "we have friendly relations with our neighbors, both Muslims and Jews." He said he hoped the spirit of Assisi, where the first international encounter was convoked by Pope John Paul II in 1986, will be reinforced by a "spirit of Cyprus." It is necessary in this century, Chrysostomos II said, "that we are seen as united, despite differences."

The policy had predictably dire results, but today, with the world in the grip of another bout of food price inflation, governments worldwide are rushing to distort the market with subsidies and quotas, price controls and export taxes. They should stop.

In the run-up to its presidential election, Russia has imposed price controls on basic foodstuffs, and plans an export tariff on wheat. China already controls prices; other importers, including Egypt, Jordan, Bangladesh and Morocco, are increasing subsidies or fiddling with their tariff regimes.

THE SIMPLE PROBLEM WITH ALL THESE ACTIONS IS THAT THEY DISTORT THE MARKET. Price controls and export tariffs make production less profitable, which discourages increased supply and can make shortages worse. Subsidies stimulate demand so it does not fall into line with higher prices. All distort the terms of trade within a country. Farmers suffer at the expense of city dwellers - especially perverse in countries with high rural poverty, such as China.

None of this is too bad in the short term. If food prices fall back, price controls become meaningless, subsidies can be withdrawn and export tariffs no longer make sense. The more pernicious problems will appear if food prices stay high. With more demand for protein from fast-growing Asian middle classes, lunatic policies to subsidise corn-based ethanol and the legacy of underinvestment during long years of low prices, that prospect seems likely.

For exporters, distorting the market in favour of domestic consumers harms the balance of payments, lowers investment and helps rivals. Nixon's ban is often credited with creating Brazil's soyabean industry. For net food importers, who can keep prices down without shortages only by offering subsidies, the risks are much more serious. Cheap food is an open-ended fiscal commitment - once in place it is politically impossible to withdraw - that can play havoc with a budget. Developing countries have improved their fiscal position in recent years. They should not throw that away.

Rich countries, where food is a small part of total consumption, have less to worry about, although they should beware the ratchet effect as food importers increase subsidies and food producers tax exports, driving up world market prices still further. But leaders in the developing world, no matter the political pressure to bring down the cost of grain, should resist.

CHEAP FOOD COMES AT A HIGH PRICE.

Nato defence ministers meeting in the Netherlands last night were discussing the plan after several European members refused to meet a shortfall in transport helicopters. Although not named, Germany, France, Turkey, Spain and Greece were reportedly the target of Robert Gates, the United States defence secretary, when he reminded member states of "their moral responsibility and collective commitments" to support their allies by responding to requests for reinforcements and materiel.

Military sources in southern Afghanistan questioned whether helicopters rented from private security companies would meet the standards required to transport British forces. Britain and other European countries fly helicopters that are equipped with complex defensive equipment to detect and defeat heat-seeking missiles. Pilots are also trained to perform difficult low-level evasive flying to throw the aim of Taliban ground fire.

Nonetheless 18 military helicopters have been lost in Afghanistan since 2001 with the loss of 110 soldiers and airmen. The last was a US Chinook transport helicopter in May. Seven people died, including a British soldier.
The need for helicopters has become more acute in response to the growing threat from roadside bombs, increasingly acquired via Iran.

The former United Nations High Representative for Bosnia and Herzegovina delivered his dire prediction after being proposed as a new "super envoy" role in Afghanistan. Lord Ashdown said: "We have lost, I think, and success is now unlikely." The assessment will be considered extreme by some diplomats but timely by those pressing for more resources for Nato operations.

Lord Ashdown added: "I believe losing in Afghanistan is worse than losing in Iraq. It will mean that Pakistan will fall and it will have serious implications internally for the security of our own countries and will instigate a wider Shiite [Shia], Sunni regional war on a grand scale.

"Some people refer to the First and Second World Wars as European civil wars and I think a similar regional civil war could be initiated by this [failure] to match this magnitude." Lord Ashdown, 66, the former leader of the Liberal Democrats, was speaking in advance of a Nato summit in the Dutch town of Noordwijk yesterday.