202
Food purchasing costs account for a large portion of household expenditures for
low-income households, and food security becomes an issue if biofuels cause food
prices to rise. In fact, biofuels were one of the factors blamed for the global food
crisis of 2008. Other factors blamed included increased demand for grains and meat
in emerging countries such as China and India, climate conditions including a
drought in Australia, the sharp decline of the US dollar, implementation of export
restrictions in food-exporting countries in order to combat domestic food price
inflation, and speculative trends in international markets.
Recent reports indicate that the impact of biofuels on food prices is relatively
small, both cumulatively and on a global scale. For example, it is estimated that
increased global production of biofuels in the 2 years ending in June 2008 only
accounted for a little over 12% of the rise in the International Monetary Fund’s food
price index (World Bank a 2010).
However, looking toward the future, prices for corn will increase by 23–72% by
2020 if countries implement their biofuel deployment plans. The World Energy
Outlook 2008 by the International Energy Agency (IEA) projects a scenario in
which food prices are calculated to rise by 10% by 2020 if biofuel deployment is
maintained at 2008 levels (World Bank a 2010).
The impact of biofuel use on the food supply and food prices must be carefully
considered. The joint statement issued by the FAO’s World Summit on Food Security
(FAO 2009) and the leaders statement of the G8 Hokkaido Toyako Summit both call
for a balance between policies promoting the sustainable production and use of
biofuels and food security.
13.1.1.3 Rural Development, Agricultural and Industrial Policy,
and Biofuels
The FAO points out that new agricultural investment to accompany biofuel use has
the potential to create new markets and employment in agriculture, which has struggled with sharply dropping food prices over the last few decades (FAO 2008).
According to the FAO, an appropriate increase in biofuel production in rural areas
will improve infrastructure development and enhance access to markets.
Furthermore, it will help to modernize agriculture and rural economies, improve
access to modern energy, and improve indoor air pollution through the use of biofuels that are less polluting to the environment. If good practices such as no-tillage
cropping and direct seeding can be employed to harvest biofuel crops, negative
impacts, including carbon dioxide (CO 2 ) emissions and consumption of water
resources, can be lessened. In addition, development of local production systems
that combine food and energy crops correctly can reduce waste and raise the overall
production efficiency.
Notably, the Cabinet of the Japanese Government approved a Biomass Nippon
Strategy in December 2002, further revising it in March 2006. The strategy outlines
concrete initiatives and a plan of action for encouraging the use of biomass, including biofuels, with the additional perspective of revitalizing agricultural, forestry,
S. Arai and H. Matsuda
Food purchasing costs account for a large portion of household expenditures for
low-income households, and food security becomes an issue if biofuels cause food
prices to rise. In fact, biofuels were one of the factors blamed for the global food
crisis of 2008. Other factors blamed included increased demand for grains and meat
in emerging countries such as China and India, climate conditions including a
drought in Australia, the sharp decline of the US dollar, implementation of export
restrictions in food-exporting countries in order to combat domestic food price
inflation, and speculative trends in international markets.
Recent reports indicate that the impact of biofuels on food prices is relatively
small, both cumulatively and on a global scale. For example, it is estimated that
increased global production of biofuels in the 2 years ending in June 2008 only
accounted for a little over 12% of the rise in the International Monetary Fund’s food
price index (World Bank a 2010).
However, looking toward the future, prices for corn will increase by 23–72% by
2020 if countries implement their biofuel deployment plans. The World Energy
Outlook 2008 by the International Energy Agency (IEA) projects a scenario in
which food prices are calculated to rise by 10% by 2020 if biofuel deployment is
maintained at 2008 levels (World Bank a 2010).
The impact of biofuel use on the food supply and food prices must be carefully
considered. The joint statement issued by the FAO’s World Summit on Food Security
(FAO 2009) and the leaders statement of the G8 Hokkaido Toyako Summit both call
for a balance between policies promoting the sustainable production and use of
biofuels and food security.
13.1.1.3 Rural Development, Agricultural and Industrial Policy,
and Biofuels
The FAO points out that new agricultural investment to accompany biofuel use has
the potential to create new markets and employment in agriculture, which has struggled with sharply dropping food prices over the last few decades (FAO 2008).
According to the FAO, an appropriate increase in biofuel production in rural areas
will improve infrastructure development and enhance access to markets.
Furthermore, it will help to modernize agriculture and rural economies, improve
access to modern energy, and improve indoor air pollution through the use of biofuels that are less polluting to the environment. If good practices such as no-tillage
cropping and direct seeding can be employed to harvest biofuel crops, negative
impacts, including carbon dioxide (CO 2 ) emissions and consumption of water
resources, can be lessened. In addition, development of local production systems
that combine food and energy crops correctly can reduce waste and raise the overall
production efficiency.
Notably, the Cabinet of the Japanese Government approved a Biomass Nippon
Strategy in December 2002, further revising it in March 2006. The strategy outlines
concrete initiatives and a plan of action for encouraging the use of biomass, including biofuels, with the additional perspective of revitalizing agricultural, forestry,
S. Arai and H. Matsuda