Biofuels and Food Security

Abstract

The Biofuel market created the linkage between energy and agricultural market prices. Biofuel policies and energy prices set the floor price of feedstock prices, and the energy prices and the upper limit of the biofuel blend ratio can decide the ceiling of feedstock prices. On the other hand, biofuels can also transmit price volatility from energy to agricultural markets, despite not always being the cause of price volatility of feedstock and related agricultural commodity prices. Brazilian bioethanol can play a crucial role in stabilizing the sugar market. One of the most crucial problems for increasing biofuel production is the competition with food and food related demand and agricultural resources. The definition of competition between biofuels and food can be divided into two dimensions; the competition with food and food-related demand and the competition with the agricultural resources. The feedstock of the second generation biofuels can compete with food and food-related demand, and agricultural resources. The development of second generation biofuels may not solve the problems associated with the competition between biofuels and food. However, the competition between biofuels and food doesn’t always have a negative impact on food security. The competition and food security impact on different dimensions. Biofuels can contribute to agricultural and rural development and can have a positive impact on a national and sub-national level, but they can also have a negative impact on household levels in the same country. International action is required to monitor whether biofuels can have a negative impact on food security and nutrition security at national, sub-national and household levels. Biofuels should be compatible with—and must not threaten—food security. The FAO in collaboration with other international organizations will have the responsibility of monitoring the impact of biofuels on food security and proposing policy recommendations to individual countries based on the results of the monitoring.