For decades, US farm subsidies have distorted trade in agricultural goods to the detriment of the developing world and encouraged an absurd competition in financial state support to farmers.

Now, at the the threshold of a new era in agriculture - the age of biofuels - there is a serious danger that the politics of the American cornfield are once again threatening to have a long-term and catastrophic impact on trade and development. Iowa is not only making its presence felt on the presidential campaign trail but also in the international campaign against carbon – for the deal that Congress has struck for American farmers could seriously inhibit the fight against climate change.

The European Union wants to cut drastically its CO2 emissions from burning fossil fuels and has demanded that 10 per cent of all transport fuels should come from plants by 2020. Yet its efforts to develop a viable domestic biofuels industry are being undermined by a perverse US subsidy scheme designed to protect the interests of the nation’s farm lobby and wean Americans off Middle Eastern oil.

It allows US exporters of biodiesel to Europe to qualify for two sets of subsidies – called “double-dipping” – meaning that in some cases they can sell their end product for less than the price paid by European manufacturers for the raw materials.

This is an industry that is, anyway, fraught with risks.

The growing of crops for ethanol can have an enormous and potentially damaging impact on growing behaviour.

In the case of some biofuel crops such as palm oil, it has encouraged deforestation and the destruction of land previously used for food cultivation in developing countries.

Oxfam, among others, has given warning that poor farmers risk being forced off their land as industrial farmers cash in on what they see as a biofuel bonanza.

Clearly, this is an issue that needs to be looked at very carefully. The European Biofuels Board may not sound like flag-bearers for an inspiring cause, but its decision to lodge a complaint to the European Commission against the US exports, which it claims “are jeopardising the concept of international trade in biodiesel”, is a fine one.

As environment ministers from almost 200 countries meet in Bali to discuss joint efforts to address climate change, it seems farcical that Europe’s nascent biofuels industry is being forced out of business by misguided US trade laws.

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