Food versus fuel is the dilemma regarding the risk of diverting farmland or forex ação for biofuels production to the detriment of the food supply. The biofuel and food price debate involves wide-ranging views, and is a long-standing, controversial one in the literature.
Biofuel production has increased in recent years. Biofuels are not a new phenomenon. Food commodity prices were relatively stable after reaching lows in 2000 and 2001. Therefore, recent rapid food price increases are considered extraordinary.
An economic assessment report published by the OECD in July 2008 found that “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. As corn is commonly used as feed for livestock, higher corn prices lead to higher prices in animal source foods. Vegetable oil is used to make biodiesel and has about doubled in price in the last couple years. They also expect rice to have a record crop. Rice has also dropped from its highs. According to a 2008 report from the World Bank the production of biofuel pushed food prices up. According to the October Consumer Price Index released Nov.
19, 2008, food prices continued to rise in October 2008 and were 6. 3 percent higher than October 2007. Since July 2008 fuel costs dropped by nearly 60 percent. The demand for ethanol fuel produced from field corn was spurred in the U. That food prices went up at the same time fuel prices went up is not surprising and should not be entirely blamed on biofuels.
Energy costs are a significant cost for fertilizer, farming, and food distribution. Over long time periods population growth and climate change could cause food prices to go up. However, these factors have been around for many years and food prices have jumped up in the last 3 years, so their contribution to the current problem is minimal. France, Germany, the United Kingdom and the United States governments have supported biofuels with tax breaks, mandated use, and subsidies. These policies have the unintended consequence of diverting resources from food production and leading to surging food prices and the potential destruction of natural habitats. Biofuels compete with retail gasoline and diesel prices which have substantial taxes included. A World Bank policy research working paper concluded that food prices have risen by 35 to 40 percent between 2002 and 2008, of which 70 to 75 percent is attributable to biofuels.