BIOFUEL IMPACT ON FOOD PRICES INDEX AND LAND USE CHANGE

Abstract.

Biofuel (ethanol and biodiesel) has played a major role in developing cleaner alternative fuel. However, some papers, mostly based on economic model, have been published that question the use of biofuels, claiming that biofuels cause more land to be diverted to crop production and cause food prices to increase. With over a decade‘s worth of data since the biofuel boom in the early 2000s, the model predictions were compared with the data and statistical analysis was performed to compare between before and after biofuel era to study the impact of biofuel on food prices and land use change. Agricultural Census data shows that agriculture land in the United States has decreased each year since the 1950s. Total cropland decreased by 88 million acres from 1950 to 2012. The Energy Independence and Security Act strictly limits the amount of land that can be used for biofuel crop production. Furthermore, papers arguing that biofuels have caused dramatic land use change, based the argument from satellite data, which has been shown inaccurate. In terms of food prices, U.S. food price index in increasing at 2.6% per year linearly with R² of 0.91 from 1991 to 2015, fully encompassing the biofuel boom. Comparatively, the inflation rate from 1981 to 1991 was 3.8% per year, and the rate from 1973 to 1981 was 8.3% per year. From this research, we have found that biofuels have not had a significant impact on land use change or food prices.