But that is not how markets work. As jatropha becomes profitable even farmers otherwise growing other cereals will grow jatropha and, if reports are to be believed, have already started to. Moreover, since productivity levels of cereals and many food crops are quite low, the farmer is much more likely to shift to other avenues. So this is another type of an impact on food availability.

There is yet another. It so happens that a large part of our cattle graze in the wastelands, and cattle-owners rarely pay for this facility. Jatropha has leaves that are not exactly palatable for cattle. As jatropha spreads, the land available for grazing gets limited. This in turn impacts the cost of milk production. Currently the rise in milk prices is not due to jatropha, but when jatropha claims a significant enough coverage of land, there will be an impact.

In other words, it will be impossible to limit the spread of bio-fuels once the market emerges. And since energy is expensive, cultivation will be driven more by energy prices and less by food. The impact on food availability and prices therefore is bound to be significant.

But if bio-fuels are generally beneficial for producers and the environment, should we not favour their growth? The answer is yes, but with qualifications. For one, the environmental impact of biofuels is not unambiguously positive. Researchers have found increased nitrogen oxide emissions, positive carbon emissions as well as other impacts on the environment. Two, if food prices were to rise, the poor will be impacted the most, so increased bio-fuel use need not be more equitable or poverty-reducing.

... contd.