According
to http://biofuel.org.uk/,
a biofuel is defined as any fuel whose energy is obtained through a process of
biological carbon fixation. Biofuels can be produced through different kinds of
crops and may differ in their chemical structure, but they all have similar
methods of obtention. some of the most used crops are sugar cane, agave, grass
and corn. By producing biofuels, we have two great impacts on economy: a
positive and a negative one.
Positively,
biofuels have expanded processing of agricultural products in rural areas,
generating a widely pursued strategy for rural economic development. By adding
value to farm products before they leave the area, new processing plants can
create new employment opportunities and generate economic spinoffs in rural
areas. In addition, farmer-owned processing facilities provide a way for
producers to integrate forward and capture potential profits from processing
and marketing their products. Consequently, the expansion of agricultural
processing in rural areas usually receives broad-based support from commodity
groups, rural development interests, and state political leaders. In recent
years, the most prevalent type of new agricultural processing ventures in the
Midwest and Great Plains states has been corn ethanol plants. Like other types of agricultural processing,
these biofuel ventures have generally received widespread support, and numerous
studies have addressed their contributions to local or regional economies. The rapid growth of the corn-based ethanol
industry shows the potential for biofuels.
However for biofuels to make a substantial contribution to the domestic
liquid fuel supply, the industry must expand beyond corn-based ethanol. As the
results of a study done by the U.S. Renewable Fuel Standard (RFS), the main
benefit of biofuels is the direct job creation (Approximately 400,000 jobs),
which greatly helps poor people in developing countries.
On
the other side we have the negative impact of biofuels on economy. Expanding
biofuel affects poor people in some developing countries by making it harder to
find and afford an adequate diet, according to recent World Bank research. The
expansion would push up prices for many food staples. Global prices for corn
and other major grains could rise by as much as 3% and the price of sugar by 8%,
issue that has already happened in countries such as Brazil and the United
States with an increase in corn, soybean and sugar prices by 27, 21 and 12
percentage points respectively.
So
what do you prefer, fuel or food?
References: Hodur,
Nancy M., F. Larry Leistritz, and Tarrand Hertsgaard. 2006.
“Contribution of the North Dakota Agricultural Products Utilization
Commission Programs to the State Economy.”
Dept. of Agribusiness & Applied Economics AAE 06006, North Dakota
State University.
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