Food Policy 37, 439–451 (2012)

Biofuel production has increased remarkably over the past decade, with ethanol reaching 66.6 million tons and biodiesel 13.5 million tons in 2009. Given the rise in agricultural commodity prices since 2006, the food versus fuel debate continues to swirl.

Jikun Huang, of the Center for Chinese Agricultural Policy, Beijin, and colleagues assessed the impacts of ethanol and biodiesel production in the United States, European Union and Brazil on local agriculture, and related sectors, over the period 2006–2020. By using a model linking agriculture and energy markets, they found that low energy prices reduce the demand for biofuels, whereas high energy prices can lead to production levels exceeding policy mandates. They also analysed the global impacts of biofuel production on food markets and found that increasing biofuel production is likely to push up prices of feedstock and non-feedstock commodities in developing countries.

The researchers emphasize how the emergence of biofuels can add value to the agricultural sector, with benefits, at the global level, to landowners and workers.