Impacts of the Biofuel Industry on the Food Systems

Introduction

The biofuel industry originated from a policy to produce clean energy and lessen the quantity greenhouse gases emitted into the atmosphere, conserve the environment and stimulate agricultural growth. As a result, the biofuel industry has developed rapidly in the last few years. A section of academics and practitioners has claimed that the biofuel industry has harmfully impacted agricultural activities and the food chain because biofuel raw materials are obtained from farm produce. It seems that these effects are widespread and notable on land usages, environments, food scarcity and rising food prices. The heightened biofuel production and the surging demands are most likely to cause prices of food commodities to rise because significant quantities are diverted for generation of biofuels. In addition, there are possibilities of prolonged shortage of animal feedstuffs. Likewise, farmers are most likely to grow new feedstuffs to counter the missing nutritional values, but their qualities must be evaluated. On the contrary, some studies have exaggerated the effects of biofuels on the system of food (Sneller and Durante 2-6). They have noted that such literature has not accounted for other variables such as by-products generated from biofuels, which are utilized as animal foodstuffs (Taheripour et al. 2-24). This essay focuses on the influences of biofuels on the food system and provides potential solutions to notable issues.

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Overview of the issue

Biofuels’ raw materials are obtained from food crops. As such, the utilization of foodstuffs to generate clean fuels has resulted in food safety issues due to some alleged effects on the food system. The main source of concern is the sustainability of the biofuel industry with regard to supply of adequate foodstuffs to support animal rearing and human consumption amidst observed effects on prices of food. Opponents of biofuels have claimed that ethanol fuels have and shall continue to “cause prices of food commodities to rise and persist to rise over a long period” (Sneller and Durante 4). In addition, some have argued that the biofuel industry is mostly likely to cause increased food shortage throughout the world, which could have unprecedented negative effects specifically on emerging economies because costs of foods will rise steadily. On the other hand, proponents of the biofuel industry and farming have shown that innovative practices could improve food production to ensure that it supports the expanding usages of food and caters for human food consumption and production of clean energy and therefore both industries can function together.

Impacts of the Biofuel Industry on the Food Systems

First, by-products from biofuel production are available for use. During the production of biofuels, feedstuff by-products are produced. These are mainly “Dried Distillers Grains with Soluble (DDGS) and biodiesel by-products (BDBP) such as soy and rapeseed meals” (Taheripour et al. 2). These authors have demonstrated that by-products may be utilized as “substitutes for grains and oilseed meals used in the livestock production industry” (Taheripour et al. 2). Consequently, there would be no severe effects of biofuels on food prices. Moreover, it is possible to separate by-products from biofuels when performing economic analysis in order to determine their impacts. However, some critics have failed to account for advantages of by-products from biofuels in the food systems. In conclusion, Taheripour et al. observed that without by-products, cereal prices had increased, but the rise was nominal when by-products were available. Thus, Doppenberg (5) observed that by-products had stabilizing effects on prices of foods.

Likewise, farmers observed rising incomes from their crops. With regard to greenhouse gases, clean energy would be used to reduce their impacts and control negative environmental impacts. Furthermore, economic benefits would also trickle to farmers and manufactures when they get incentives and readily available markets for their produce.

One important issue is to comprehend the influence of the biofuel industry on the food system, specifically prices. The major effect of biofuels on the food system emanates from rising food prices and therefore it causes inflation. The affected feedstuffs are mainly “corn, soybean meal, soybean oil, wheat, barley, and oats” (Alexander and Hurt 2), which form a significant component of the food system. Market forces such as supply and demand influence food prices. When the biofuel industry was nascent, there were notable increments in quests for corn and soybean oil. As a result, their prices rose steadily. Such rising prices were seen as “incentives for farmers to produce more corn and soybean oil by increasing acreage” (Hertel, Tyner and Birur 3). As crop producers used increased acres for more crops for biofuels, reduced “acres became available for other crops for food and animal production” (Hertel et al. 3). As a result, the need for crops for the biofuel industry also causes price increments for crops for human consumption and animal rearing. All these crops compete for the same acreages of land (Hertel et al. 3). Nevertheless, abrupt effects on escalating prices of food differ for specific food commodities.

Livestock and poultry farmers are the main customers for soybean and corn produce. For example, there could be instantaneous reaction in the market when there are increments in prices of food. For instance, between 2006 and 2007 when “corn prices moved up sharply, broiler and egg producers quickly responded by reducing production” (Alexander and Hurt 2). The effect was felt immediately on prices of poultry and eggs, which rose steadily while cattle kept at feedlots reduced, in addition to the weights of meat. As such, beef supplies reduced, causing rise in prices. Conversely, hog farmers never felt any instantaneous rise in prices of their products. Rather, they noticed a reduction in profit margins because of increasing prices of foods.

Conversely, the effect was immediately felt when price of milk increased steadily because of increased usages and quest for dairy products all over the world. Thus, milk production generated more profits for farmers. To date, it is not simple to determine how the biofuel industry will impact the food system in the future as the industry matures. If the global production of food surges and meets demands, then the generation of biofuels from food crops may not have significant increase on food prices. While the growing biofuel industry has led to many challenges in the food system, including the struggle for food resources and related high rising costs, innovative practices and interventions may lessen such negative effects later.

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Hyperinflation is not expected because of this complex interaction between the food systems and the biofuel industry. This is most likely not to occur due to global networks of food distribution. That is, a shortage in one location might be counteracted by excess produce from regions. Perhaps opponents of the biofuel industry could have exaggerated effects of the industry on the global food system.

Possible solutions

First, developed countries should embrace favorable food policies to enhance sustainable use of crops for human consumption and the biofuel industry. They may restrict the volume of crops for biofuels and formulate policies to regulate food usages and prices. Second, subsidies are required to support agriculture to enhance production and other areas that depend on food crops. Subsidies have resulted in increased earnings for farmers. Conversely, costs of food have risen in the process. It could be difficult for nations to sale crops with surging prices and therefore, their governments should introduce policies to limit consumption of crops required in both cases to control increments in prices of foods. To control emission of greenhouse gases, it is imperative to find other sources of clean energy or raw materials for biofuels, which have minimal or no effects on costs of food commodities. Finally, innovative agricultural practices could result in increased production of food for human consumption, animal rearing and the biofuel industry, as well as ensure sustainability of the food system.

Conclusion

The biofuel industry has affected the food system by creating scarcity and higher prices because of the growing demands for farm produce for the industry. It also affects acreage allocated for food production and crops for clean energy generation. While food prices are expected rise because of this demand from the biofuel industry, they are not expected to rise fast and steadily. Hence, the global agricultural sector should determine the production rates of crop production for various usages. Overall, prices of food commodities are most likely to rise due to market forces.

Works Cited

Alexander, Corinne and Chris Hurt. Biofuels and Their impact on Food Prices. 2007. Web.

Doppenberg, Jannes. Biofuels: implications for the feed industry. Wageningen, The Netherlands: Wageningen Academic Publishers, 2007. Print.

Hertel, Thomas, Wallace Tyner and Dileep Birur. Biofuels for all? Understanding the Global Impacts of Multinational Mandates. 2008. Web.

Sneller, Todd and Douglas Durante. Issue Brief: The Impact of Ethanol Production on Food, Feed and Fuel. 2008. Web.

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Taheripour, Farzad, Thomas Hertel, Wallace Tyner, Jayson Beckman and Dileep Birur. Biofuels and their By-Products: Global Economic and Environmental Implications. 2008. Web.

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