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Posted by / 13-Oct-2020 03:08

Additionally, as some crops, such as corn become more profitable to grow because of biofuel subsidies, farmers switch to planting them and reduce their plantings of other types of crops. government explains the relationship between US biofuel policy and food prices, “Reductions in U. exports of corn and other crops lead to higher, world commodity prices. S., it is easy to plant less soybeans and more corn when the price of corn doubles, as occurred recently. so we are a major contributor to the increase in vegetable oil and palm oil prices.” In Europe, sunflower oil and rapeseed oil that were previously produced for consumption are now being used as biofuels to generate “green” energy.

This lowers the market supply of the other crops and drives up overall prices. Increased demand for vegetable oils to meet this new energy need, along with increased demand from population growth, continues to drive up prices.

Biofuels seemed like a sure winner – firstly, because supporting biofuels meant supporting domestic agricultural industries.

The growth of the biofuel industry has triggered increases not only in the prices of corn, oilseeds, and other grains but also in the prices of seemingly unrelated crops and products.

The use of land to grow corn for ethanol is reducing the acreage devoted to other crops.

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For example, sugarcane, which is the most efficient ethanol crop, grows abundantly in the tropics but not in the north, while jatropha, the most efficient non-food biodiesel crop, grows in southern Asia and Africa.

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