Growing crops for biofuels is often criticized because of its direct competition for land for food production. The recent price increases on world food markets are partly a result of this competition. For instance, cereals prices have increased by more than 60% since 2005 and in 2006 sugar prices peaked at a level twice as high as the level of previous years. There are concerns whether these increases will continue and if the world will run out of resources for food production. According to the authors, these concerns are largely unwarranted. For one, higher prices for food also mean that feedstocks are becoming increasingly expensive for bio-energy production and this endogenously limits the amount of feedstocks that will be used in the energy market. In addition, there is no imminent global resource shortage, neither for land nor for water that would support these concerns. Even with an expanding world population there is globally still enough land and water to grow a substantial amount of biomass for both food and bio-energy production. However, there is an uneven distribution of natural resources, resulting in huge regional differences with important areas experiencing major land and water shortages. China and India, for example, account together for more than 35% of the total global population and both have exploited most of the land and water resources available for agriculture. On the other hand, sub-Saharan Africa and South America still have the potential, in terms of suitable land and exploitable water, to expand areas for agricultural production.

The growing demand for bio-energy will have a negative and positive effect on food. Higher food prices can increase food insecurity among the urban poor and the rural landless population. On the other hand higher prices and more marketable production can stimulate the agricultural sector and create new opportunities for rural communities. At the national level it can offer development opportunities for countries with significant resources.

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