and industrial commitments. Biofuels can increase food security when the necessary investment and technology improves overall agricultural productivity and subsequently food availability. While higher food prices may reduce its accessibility, biofuels can improve local economies and hence improve the ability to purchase food.
New infrastructure built to support a developing biofuels sector, can improve access to markets in various industry sectors, and thereby increase overall accessibility. Stability as well as food production and use can be improved through increased access to locally produced biofuels that allow, for instance, for crop drying, cooking and purification of drinking water.
The impacts of biofuels production on food security vary a great deal between communities, regions and countries. At a national level, food and energy exporters have a good chance of generating positive effects, whereas the outcome for those importing food and exporting energy resources, or vice versa, is likely to be fairly neutral. Net importers of both food and energy will require international support. Similarly at the local level, those who benefit from higher prices for crops may be able to balance higher food prices, in contrast to the urban poor who spend an already sizeable share of their income on food.
Figure 3.1.10 outlines possible scenarios for the impact of biofuels on agricultural prices and food security. Although there are several factors that affect agricultural prices, including seasonal variation, market speculation,
Impacts of first-generation biofuels on agricultural prices
TAR-V3 WEO-V1 WEO-V2
Other crops Livestock
Note: Price changes relative to the reference scenario REF-01; for scenarios explanation see next figure.
Source: OFID, Biofuels and Food Security, 2009. Figure 3.1.10 Impacts of fi rst generation-biofuels on agricultural prices
and extreme weather patterns, some biofuel development scenarios indicate a relationship between agricultural prices and biofuel production. Here, the scenario projects that the largest price increase will be for cereals, with the introduction of first-generation biofuels triggering a price increase ranging from 8 percent to over 35 percent.
Corn, for example, is a major biofuel feedstock in the US, as well as being a staple food crop in many South American and African countries. It is therefore likely that an increase in the market price for corn will have implications for food security in some regions. When the global market price of corn rose significantly in 2007 it had several implications for poor communities in Mexico for which corn is a staple food.