US Secretary of State Condoleezza Rice has admitted that the decision to set aside American farmland for the production of corn for biofuels may in part be driving up world food prices.

"There has been apparently some effect, unintended consequence from the alternative fuels effort," Rice told a gathering of the Peace Corps in Washington, D.C.

"Although we believe that while biofuels continue to be an extremely important piece of the alternative energy picture, obviously we want
to make sure that it is not having an adverse affect," she said.

"We think that it is not a large part of the problem, but it in fact may be a part of the problem, the ethanol debate," Rice added.

Nearly one-third of the US corn harvest is currently being funnelled into biofuel production.