Biofuel impacts on food prices
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Bioenergy > Issues > Food > Biofuel impacts on food prices
Information about biofuel impacts on food prices.
- The extent to which biofuels contribute to increases in food prices is controversial. This page provides information on various useful studies that have been conducted on this topic.
- This topic was a major focus of the June 2008 "High-Level Conference on World Food Security: the Challenges of Climate Change and Bioenergy".
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Resources
- "Rising Food Prices" - page on the website of the International Food Policy Research Institute (IFPRI)
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Studies
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United Kingdom
- The Impact of Biofuels on Commodity Prices, Simone Pfuderer and Maria del Castillo, Economics Group, Department for Environment, Food and Rural Affairs, April 2008.
- The Gallagher Review, especially Chapter 7. Full original report at The Gallagher Review of the indirect effects of biofuels production (PDF file).
- Conclusions include: "Increasing demand for biofuels contributes to rising prices for some commodities, notably for oil seeds. In the longer term this has a net small but detrimental effect on the poor that may be significant in specific locations. Shorter-term effects are likely to be significantly greater. Lower biofuel targets and directing production onto idle land reduces these negative impacts." (Summary of Chapter 7)
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United States
- Biofuels and the global food crisis: a dangerous or a new opportunity? Dr Wolfgang Palz, Chairman - World Council for Renewable Energy (WCRE), October 2008.
- Biofuels and Grain Prices: Impacts and Policy Responses, Mark W. Rosegrant, International Food Policy Research Institute, May 5, 2008
- Biofuels and the Food Price Crisis: A Survey of the Issues, Kimberly Elliott, Center for Global Development Working Paper Number 151, August 2008.
- ERS "Retail Food Price Outlook: 2008" link Presented by Ephraim Leibtag, Food Markets Branch, Food Economics Division, ERS-USDA. Presented at the 2008 Agricultural Outlook Forum: Energizing Rural America in the Global Marketplace
- Texas A&M Food Policy Center Study Cites Rising Oil Costs as Underlying Force in Food vs. Fuel Debate, 26 April 2008 by Biofuels Journal: "A study released April 11 by Texas A&M's Agricultural and Food Policy Center illustrates corn prices have had little to do with rising food costs, the National Corn Growers Association (NCGA) notes."
- "The Effect of Ethanol Production on the U.S. National Corn Price." April 2008. University of Wisconsin-Madison Department of Agricultural & Applied Economics Staff Paper No. 523. By T. Randall Fortenbery and Hwanil Park
- "Biofuels: Food vs Fuel Revisited" by Jane Earley. Page 12. The March 2008 issue of ICTSD's BRIDGES Review
- Cornhusker Economics. "The Corn Ethanol Boom and Food Prices" By Richard K. Perrin and Jim Roberts. February 13, 2008
- Global Development and Environment Institute, Tufts University. Policy Brief, No. 07-03, Dec. 2007. "Feeding at the Trough: Industrial Livestock Firms Saved $35 billion From Low Feed Prices" By Elanor Starmer and Timothy A. Wise* link
- Environment. Volume 49. No 9. "The Ripple Effect: Biofuels, Food Security, and the Environment" By Rosamond L. Naylor, Adam J. Liska, Marshall B. Burke, Walter P. Falcon, Joanne C. Gaskell, Scott D. Rozelle, and Kenneth G. Cassman.
- "The Relative Impact of Corn and Energy Prices in the Grocery Aisle" by John M. Urbanchuk, Director, LECG LLC. June 14, 2007
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International
- Food and Agriculture Organization (FAO)
- The Right to Food and the Impact of Liquid Biofuels (Agrofuels), Asbjørn Eide, Food and Agriculture Organization of the United Nations, June 2008.
- "Opportunities and challenges of biofuel production for food security and the environment in Latin America and the Caribbean"
- International Monetary Fund (IMF)
- Food and Fuel Prices—Recent Developments, Macroeconomic Impact, and Policy Responses: An Update, Fiscal Affairs, Strategy, Policy, and Review, and Research Departments, September 19, 2008.
- Fuel and Food Price Subsidies: Issues and Reform Options, Fiscal Affairs Department, approved by Teresa Ter-Minassian September 8, 2008.
- Food and Fuel Price Surge, IMF Seminar Presentation, July 1, 2008.
- Food and Biofuels: The Price of Success, Finance & Development Magazine, Simon Johnson, IMF Research Department, September 2007.
- World Bank
- Rising Food and Fuel Prices – Addressing the Risks to Future Generations HDN and PREM Networks, October 12, 2008.
- A Note on Rising Food Prices, Donald Mitchell (Lead Economist - Development Prospects Group), Policy Research Working Paper 4682, July 2008.
- Response to Rising Food Prices. "Rising food prices: Policy options and World Bank response" Released Spring 2008. link - This note is being distributed for information as background to the discussion of recent market developments at the Development Committee meeting. It was prepared by PREM, ARD and DEC, drawing from work across the Bank. Questions/comments should be addressed to Ana Revenga, PRMPR (ext. 89850).
- Other International Organizations
- Biofuel vs.Food Crisis UNDP Bangladesh, July 13, 2008.
- Food Policy Report No. 18. "The World Food Situation New Driving Forces and Required Actions" By Joachim von Braun. December 2007
- IEA (International Energy Agency) - The IEA is doing analysis that should be released mid 2008.
- Opportunities and risks arising from the use of bioenergy for food security in Latin America An analysis of the potential impacts of bioenergy production on food security in Latin America jointly prepared by ECLAC/CEPAL and FAO, 2007
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Food and Biofuels Hearings - Washington DC
- Current and projected impacts of biofuels on food and gasoline prices Joint statement by Secretary of Energy Samuel W. Bodman and Secretary of Agriculture Edward T. Schafer, Responses to Questions from Honorable Jeff Bingaman - Chairman Committee on Energy and Natural Resources United States Senate, June 11, 2008.
- Hearing Wednesday, May 14, 2008. U.S. Senate Committee on Foreign Relations.Responding to the Global Food Crisis.
- Hearing Thursday, June 12, 2008. U.S. Senate Committee on Energy & Natural Resources. Full Committee Hearing: to receive testimony on the relationship between US renewable fuels policy and food prices
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News
- If a Tree Falls in the Forest, Are Biofuels To Blame?, article by Wall Street Journal Stephen Power, Nov. 11, 2008.
- Biofuel policies in OECD countries costly and ineffective, says report, 16 July 2008 press release by the Organization for Economic Cooperation and Development (OECD): "Government support of biofuel production in OECD countries is costly, has a limited impact on reducing greenhouse gases and improving energy security, and has a significant impact on world crop prices, according to a new study of policies to promote greater production and use of biofuel in OECD countries."
- "OECD’s Economic Assessment of Biofuel Support Policies (PDF file) says biofuels are currently highly dependent on public funding to be viable."
- "The impact of current biofuel policies on world crop prices, largely through increased demand for cereals and vegetable oils, is significant but should not be overestimated. Current biofuel support measures alone are estimated to increase average wheat prices by about 5 percent, maize by around 7 percent and vegetable oil by about 19 percent over the next 10 years."[1]
- Secret report: biofuel caused food crisis, 4 July 2008 in The Guardian: "Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian."
- "The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises."
- "Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt."
- The report "argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher."[2]
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Categories: Economics | Food | Impacts | Policy
