Not surprisingly many countries have taken a pro-active stance where growth of bio-fuels are concerned. The US has tended to focus on ethanol derived from corn; Brazil is largely focusing on sugarcane. India has taken the jatropha route combined with sugarcane. And still others are concentrating on palm oil and vegetable oil based fuels. The character of the fuel differs depending upon the fuel used. Sugarcane and corn, for instance, yield bio-ethanol whereas jatropha and palm yield bio-diesel. But these are the details, and this is not where the devil hides.

Let us first take the case of corn. Corn is conventionally used both for human consumption and an important component of feed for livestock. As petroleum has become more expensive it has become more profitable to mix bio-ethanol derived from corn with petroleum products. But in the process less is available for both humans and livestock. The net result has been increased prices of corn tortillas in Mexico and overall upward movement of food products.

Similar issues have either already emerged, or will emerge, in the case of other bio-fuels that have a dual use as food consumption for man or animal. The point is that there is a direct impact on food availability and therefore prices in a range of food products.

But there are also indirect impacts. As a biofuel becomes more profitable, even if it has no other use, it will impact food prices. Take the case of jatropha — something that our policymakers and corporate houses have taken a great liking to. Jatropha does not require too much water and is ideal for cultivation in our wastelands. In theory, therefore, jatropha cultivation would not take away from our foodcrop production and will only create additional income and employment opportunities. So far so good.

... contd.