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The Food-Feed-Fuel Triangle : Implications of Corn-based Ethanol for Grain-Use Competition

Author

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  • Arindam Banerjee

    (Research and Information System for Developing Countries)

Abstract

The contemporary world is witnessing certain critical changes in the domain of grain utilization. With the ongoing efforts to substitute fossil fuels with bio-fuels, there has been a rise in the importance of fuel-use of cereals. This adds a new dimension to the food-feed competition that emerged in the 20th century. Revisiting Yotopoulos food-feed competition model in the context of the large scale corn-ethanol production in the US, this paper attempts to draw out the new theoretical tenets of grain-use dynamics that have emerged with the new food-feed-fuel competition. The crude oil prices appear to play a more important role in the competition for grains between the various end-uses. Along with this, the equilibrating role that animal-feed has played in the grain-use dynamics in developed countries, with large middle-classes, is jeopardized with the advent of grain-based bio-fuels like corn-ethanol. The examination of the issue reveals that the US bio-fuels targets can have more serious implications for food security in the future that what meets the eye.

Suggested Citation

  • Arindam Banerjee, 2010. "The Food-Feed-Fuel Triangle : Implications of Corn-based Ethanol for Grain-Use Competition," Microeconomics Working Papers 23065, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:microe:23065
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    File URL: http://www.eaber.org/node/23065
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    References listed on IDEAS

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    1. Mitchell, Donald, 2008. "A note on rising food prices," Policy Research Working Paper Series 4682, The World Bank.
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    Cited by:

    1. Wixson, Sarah E. & Katchova, Ani L., 2012. "Price Asymmetric Relationships in Commodity and Energy Markets," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122553, European Association of Agricultural Economists.

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    More about this item

    Keywords

    bio-fuels; grain-use dynamics; food security; US bio-fuel targets;
    All these keywords.

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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