Has the growth in biofuels helped drive up food prices?
A number of studies (including from IFPRI) have attributed a sizable proportion (up to one third or more) of increases in international market prices of cereals and oils to the strong growth in crop-based biofuels programs. Which prices one uses is critical, as domestic food price indices differ greatly across countries, depending on the composition of diets and the share of food products in overall consumption. This share is high for poorer developing regions, in general, compared to wealthier countries, where the majority of household expenditures go towards non-food items. This is part of the reason that estimates of food price impacts of biofuels from the U.S. Department of Agriculture, for example, differ so much from those of other organizations. They consider the effect on retail consumer prices, as opposed to international market prices, which tend to be more relevant to those countries that depend heavily on imports to meet domestic food staple needs. The methodological approa
