One of Richard Branson's Virgin jets made an experimental trip to the Netherlands the other day. For the first time, the aircraft carried in its tanks a mix that contained biofuel. The self-advertising tycoon and the self-renewing energy source were doing their bit for the environment. Whether Branson also realised that going green could lead to millions going hungry went unmentioned.

In Italy, meanwhile, national pride and a nation's pockets are under strain as the price of pasta continues to rise. In France, the cost of the daily baguette has become absurd, they say. Here in Britain, a national staple is coming under threat: the basmati rice to accompany your curry has doubled in price. These are troubled times in the consumer paradise.

Elsewhere, the UN World Food Programme has told the Financial Times that its efforts to keep 73 million people in 78 countries alive are in severe difficulties. The prices of basic foodstuffs are rising almost as fast as the price of the fuel needed to ship the food to those who need it most. The impending shortfall for the programme amounts to half a billion dollars.

Branson's ethical problem can be illustrated by a single statistic. Such is the craze for clean (and subsidised) biofuels, agriculture in the United States is producing 60 million tonnes of what Americans call corn just to keep cars and aircraft in motion. With oil in the vicinity of $100 a barrel, many other countries are rushing to turn potential food into actual fuel. At the risk of brutalising a complex argument, the planet could become cleaner but hungrier.

That is not the west's problem, as such. But anyone who has been in a supermarket recently, and that would be most of us, has seen prices rise steadily. The trick question once asked of populist politicians - what's the price of a loaf? - no longer sounds so clever. For that commodity, the £1 mark is a memory, despite the best efforts of the chains to squeeze their suppliers.

Officially, food prices in Britain rose by 3.9% in the year to January, though some allege that the real increase, depending on the "basket" chosen, could be 10% or higher. Globally, in any case, wheat prices have doubled over the past three years. Other staples have followed the pattern. This is a burden for the developed world, clearly, but who talks about dearth and an obesity crisis simultaneously?

Hundreds of millions of others lack our protective layers. If you are truly poor, and if you are forced to spend between a third and three-quarters of your income on food, and if there is no giant supermarket chain eager for your custom, percentages are inflated and price increases can easily become death threats. The World Food Programme may have the equivalent of the population of Germany in its care at any given time, but it supports only one in every ten of the world's hungry.

When economists stroke their imaginary beards and speak, as though to children, about markets, free trade, supply and demand, they see nothing fundamentally interesting in any of this. So "Chicago Board of Trade wheat for delivery in March" rose 90 cents to $11.99 a bushel on Monday thanks to electronic trading in Asia? The free-trader probably deplores only the fact that 90 cents is the maximum increase allowed in capitalist America. So "high-protein spring wheat" went up by 25% on the Minneapolis Grain Exchange, setting a new record of $20 a bushel? The issues of profits, profiteering or speculation are held to be immaterial. Booming China and expanding India are driving demand, you will be told, and their ability to do so is an encouraging example of economic vibrancy when the west is jittery.

China, though, contains 700 million people living on the poverty line; India could top that figure without too much effort. Prosperity, like food, like supply, like demand, involves imperfect distribution systems. Of more interest, perhaps, is the fact that India has banned all rice exports ("luxury" basmati excepted) and is spending billions on "food security". The world's second-largest wheat producer is importing wheat.

China, meanwhile, has had a tough winter at a time when food prices were already climbing. Food exports are being restricted and imports encouraged. Russia has frozen the price of a range of staples. Indonesia has increased its food subsidies. Thailand is to forbid price increases and Kazakhstan announced on Monday that it will restrict wheat exports. Increasingly, other countries are following suit. Such behaviour in a British shopper would be decried as panic-buying and hoarding. The US cannot offer much encouragement. Climbing prices and profits aside, its grain reserves are as low as they have been in a quarter of a century.

The World Food Programme has been told it will have to make do with less. As one London newspaper said confidently yesterday: "The long era of cheap food is finally over." You would have searched in vain for an explanation of the consequences.

A curiosity underlies all these phenomena, after all. True, subsidised biofuels may be good for the environment, arguably, and bad for the food supply chain. True, a new appetite for meat and dairy among the rising middle classes of China and India has altered demand patterns hugely. True, the oil price adds greatly to transport costs. But here's a thing: global food production is not falling. In fact, it is continuing to rise.

It is possible, of course, that this increase in supply simply isn't great enough to match a vast new demand. It is equally possible that world trade rules make little distinction between profit and profiteering. Oil was $25 a barrel before the invasion of Iraq; it flirts with $100 today. At no point during this steep climb did anyone suggest that the stuff had run out, or was in genuinely short supply. As with food, the future may be another matter; for now, "supply and demand" are concepts open to a variety of interpretations.

Still: good for "the farmer", then? If you mean the people who actually do the work, not necessarily. In the US, the grizzled owner-operator in his blue coveralls is a fast-dying breed. Big companies own the big prairies. In Britain, too, increasingly "the farmer" is a grain baron or a pension fund.

Yet why should the consumer grumble? By some accounts, perhaps optimistic, this country could be self-sufficient in food if only we chose to eat sensibly and stopped wasting food in quantities so obscene they make complaints about prices sound daft. If you need to worry about food in the 21st century, worry about climate change. You can't grow much without water. And that, it so happens, is the commodity the west has been busy privatising all across the Third World.

None of this will matter much, of course, to those 700 million Chinese on their dollar-a-day equivalent. Their children will go on flocking to the cities, following the cooking smells. The World Food Programme, too, will just have to cope, or not, with the fact that those in its care happened to be hungry when the price mechanism was given a little nudge.

Oil company profits caused controversy recently. Will the same attention be paid when the agri-businesses file their returns for 2008?