Japanese Research Institute Simulates Biofuel Policy Impact on Crop Prices

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The Policy Research Institute Japan's Ministry of Agriculture, Forestry and Fisheries (PRIMAFF) released the results of quantitative analyses on how the growing demand for crops for biofuel production would affect global crop price, on January 30, 2009. Based on the price of maize in 2006/07 (from April 2006 through March 2007), the Institute estimated the price of maize for each year to 2018 under two scenarios; one in which the U.S. continues to implement the current bioethanol program, and one in which it does not. The results showed that without the ethanol program the price decreased by 22.2 percent for 2007/08 and by 36.9 percent for 2017/18, from the 2006/07 level.

The PRIMAFF's result for 2007/08 was mostly consistent with the estimates by the International Food Policy Research Institute (IFPRI), which was a 20 percent decrease from the base year. The IFPRI is known by biofuel and food supply/demand experts as an organization that provides independent views.

Meanwhile, the U.S. Secretary of Agriculture and the Council of Economic Advisors in the U.S reported in 2008 that increased biofuel production was only accountable for three percent of the global food price increase. In addition, many argue that it is difficult to extract only the impact of biofuel, because crop prices are influenced by various factors intertwined with each other, such as weather, growing demand in emerging countries, and increases in crude oil prices.

The Policy Research Institute, MAFF official website
http://www.maff.go.jp/primaff/e/index.html

Posted: 2009/06/13 06:00:15 AM