"The expanded use and production of biofuels will not necessarily contribute to reducing greenhouse gas emissions as was previously assumed," the UN Food and Agriculture Organisation (FAO) director general Jacques Diouf told a news conference.
The UN also warned that massive subsidies in wealthy countries limit the opportunities elsewhere to profit from the boom in biofuels.
And the FAO predicts food prices will continue to rise as demand grows for biofuels despite their limited importance in terms of global energy supply.
Diouf, unveiling the FAO's annual flagship report, urged a review of policies concerning subsidies, tax incentives, tariffs and mandated blending of biofuels with fossil fuels.
The report, titled, Biofuels: Prospects, Risks and Opportunities, finds that while biofuels will offset only a modest share of fossil energy use over the next decade, they will have much bigger impacts on agriculture and food security.
"The emergence of biofuels as a new and significant source of demand for some agricultural commodities - including maize, sugar, oilseeds and palm oil - contributes to higher prices for agricultural commodities in general, and for the resources used to produce them," Diouf wrote in the report.
"For the majority of poor households who consume more food than they produce, higher prices can pose a serious threat to food security - especially in the short term," he said.
"The challenge is to reduce or mangage the risks while sharing the benefits more widely," Diouf told the news conference.
Biofuel production using agricultural commodities more than tripled from 2000 to 2007, and now covers nearly two per cent of the world's consumption of transport fuels.
