Are Government Bio Fuel Incentives Raising Food Prices?

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Almost all fuels used in the world contain carbon. This carbon is obtained from a process called carbon fixation. Carbon is incorporated into the fuel through this process.

Petroleum fuel from fossil is obtained from carbon fixation. However, carbon in fossil fuel was incorporated into the mass of the fuel millions of years ago.

Very little of today’s carbon in the earth is progressively converted into a component of fossil fuel. However, there is another type of fuel called bio fuel made from organic substances known as biomass.

This fuel could be a liquid, gas or solid substance. Biogas, a common bio fuel, is widely used for domestic purposes. However, most of bio fuel around the world is used in road transport.

Organic substances from plants and animals are used to make biodiesel or alcohol, which is added to gasoline to moderate the composition of the emissions of a vehicle’s engine.

The government has been encouraging the use of bio fuel since it is an alternative to the fossil fuel. Moreover, the government of the United States has been issuing incentives on the bio fuels to encourage their production.

It is arguable that bio fuel can be used as an alternative to natural fossil fuel with a less significant impact on the environment. However, bio fuels have their own disadvantages.

While some experts claim they could reduce pollution, others claim that bio fuels have a greater impact on the food chain, and the result is not worth risking.

Since a significant amount of biomass is consumed in the production of bio fuel, some experts and analysts claim that food shortages in the world are due to extensive use of bio fuel. They argue that the material used to make bio can otherwise be used in areas with a tendency of food shortages.

Furthermore, the shortages of food that are created by the production of bio fuel make food prices to rise. In addition, the high price that fuel producers offer for the biomass for making fuel tends to compete with food prices and automatically raises them.

On the other hand, some analysts say that the manufacture and use of bio fuel is not the cause of the fuel prices. According to them, the fraction of to total fuel consumption that is covered by bio fuel is insignificant compared to the minimum amount of bio fuel sufficient to cause a rise in food prices.

Sarah glazer in her article in the journal,”Global Researcher”, says that bio fuel is a major contributor to the rising food prices in the world. She claims that corn prices are an example in the United States (Glazer 501).

According to her article, corn prices have made people in the United States abandon corn as food product, opting for other grains. Demand for other grains has in turn made general food prices to rise. Since all food prices have risen, it is difficult for untrained person to trace the problem back to the use of bio fuel.

The impact of bio fuel on the food prices and food scarcity is widespread, with the effect having a more grievous harm on people in the developing countries (Glazer 506).

On the other hand, Glazer points out that it cannot be confidently established that bio fuel is the cause of the rising food prices. In the same article, she says that permanent climate change, crop disease, and world politics could also be the major causes of the rising food prices.

The complexity of food market makes it difficult to establish the real cause of the rising cost of food. However, she maintains that several factors are responsible for the high price of food, with bio fuel possibly being the major factor (Glazer 515).

Valerie Blackman, in her article for the International Monetary Fund, claims that the use of bio fuel has two debatable sides concerning the effect of new alternative fuel on food prices.

One side of the argument maintains that the major effect of incentives on bio fuel is the development of the agricultural sector with higher selling prices for agricultural products (Blackman 3).

In this essence, bio fuels could be used with insignificant effect on prices if there is regulation of the fuel-processing sector. This could encourage development in rural areas where agriculture is a significant economic activity.

She maintains that while bio fuels may use up food as a raw material in production, they play an important role in keeping the price of fuel stable and maintaining a steady supply.

This is an important role for the bio fuel since while the cost of fuel is low, food prices at retail outlets will also be significantly low. Consequently, the use of bio fuel could be indirectly encouraging lower food prices (Blackman 7).

Clayton Ogg explores the two-sided issue of government policies and incentives and their effect on food and environment. The effect of bio fuel on environment is ambiguous in his research paper.

However, he objectively presents facts on both sides of the argument. The research paper claims that the proportion of total food produced that is necessary for production of sufficient bio fuel is so overwhelming that the positive effect of the use of bio fuel on the environment is obscured (Ogg 13).

Destruction of forest and alienation of land that could otherwise be used for production of food are the most significant negative effects. This supports the argument that incentives on the use of bio fuel are fuelling the rising of food prices.

More land is being used to produce the raw material for bio fuel than it is being use for food production. Moreover, farmers are more inclined to producing raw material for fuel rather than produce food (Ogg 15). Consequently, the market forces respond to the scarcity of food with rising food prices.

When food prices rise above normal level in the United States, demand for foreign food supply increases. As a result, the country becomes a major consumer of food imports from other countries. This is the cause of the universal rise of food prices.

On the other hand, Ogg presents poor agricultural policies other than bio fuel incentives and inflation as the culprits of the rising food prices. He argues that there is no direct relation between food prices and bio fuel use.

In addition, if such a relationship can be confirmed, then, it is also possible to confirm the relationship between fuel prices and food prices. Moreover, it possible that the rising fuel cost directly causes rise of food prices.

Thus, the relationship between bio fuel, food supply, and food prices is too complex for anyone to conclude authoritatively that incentives on bio fuel use cause rise in food prices (Ogg 16).

The relationship between bio fuels, food prices, and the environment is a complex phenomenon. This is evident from the inconclusive debates that many analysts have presented.

The only verifiable fact is that a complex relationship exists between bio fuel and food. Moreover, it can be noted that all analysts acknowledge that bio fuel and food share the same resources in production.

There is still more research and analysis to be done on the topic to establish facts. It is also important for the government to establish the real facts on the issue for the sake of stability in future.

Works Cited

Blackman, Valerie. “Biofuel Demand Pushes Up Food Prices.” IMF Survey Journal 24.5 (2007): 2-10. Print.

Glazer, Sarah. “Rising Food Prices.” Global Researcher 5.1 (2009): 499-524. Print.

Ogg, Clayton. “Avoiding more Bio Fuel Surprises:.” Journal of Development and Agricultural Economics 15.3 (2009): 12-17. Print.

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Are Government Bio Fuel Incentives Raising Food Prices?

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