Global Biofuel Use and China's Food Security: Price and Policy Transmission Paths

Abstract

The global fossil energy crisis and the pressure on environmental protection led to countries facing new issues related to energy and economic development. Biofuels are becoming favored by more and more countries. Along with the increase in biofuel production in major grain-producing countries, both global food consumption and prices have increased in recent years. This has raised growing concerns about food security. The current controversies about biofuels and food security include two aspects: the price crisis [1, 2, 3] and the resource crisis [4, 5, 6, 7, 8, 9, 10]. As China is a major grain producer and trader, the development of biofuels will inevitably affect its food security. With more than 1.3 billion people, China's food security is an important part of global food security. From 1990 to 2012, China's corn yields increased significantly but fluctuated frequently. Over the same period, the demand for corn increased strongly.1 As global grain supply is tight, it is difficult for China to satisfy domestic demand by international trade. If domestic supply cannot meet demand, then domestic food prices are likely to rise.