Singapore (PTI): India on Wednesday blamed the US policy of diverting food grains such as corn for producing bio-fuels for the spurt in food grain prices globally.

Finance Minister P Chidambaram also criticised lack of adequate regulations in the US sub-prime market, which has caused global financial uncertainties.

"It has been estimated that nearly 20 per cent of corn grown in the United States is diverted for producing bio-fuels. As citizens of one world, we ought to be concerned about the foolishness of growing food and converting it into fuel," Finance Minister P Chidambaram said here.

He said the demand for staple food was on the rise, leading to higher prices, but diverting food for fuel had also contributed to increase in food prices.

Addressing a gathering of academics, scholars, diplomats and bureaucrats at the Lew Kuan Yew School of Public Policy in this island state, the minister said this process (diversion of food grains for bio-fuels) was "a sign of the lopsided priorities of certain countries".

Referring to the current global uncertainty and the sub-prime mortgage market crisis that triggered the turbulence, Chidambaram blamed it solely on poor regulations and lax supervision.

"If this had happened in developing countries, we would have been lectured on the virtues of bankruptcy. Since this is happening in developed countries, no one pauses to ask whether all the old arguments are not being made to stand on their head," Chidambaram said to applause from the audience.

Attributing rising global food grain prices to domestic inflation, he said that prices of maize, rice and wheat, all staple items of food, had either doubled or trebled between 2004 and 2008.