The Food vs Fuel tradeoff,biofuel regulation and global impact

An article in the New York Times (April 7,2011) describes the impact of rules regarding biofuel use (36 billion gallons by 2022 in the US, similar goals in China, India, Indonesia and Thailand).  The article focuses on cassava, a root now exported as chips from Thailand to China, after China banned the use of grains to make biofuel.  Price increases cause farmers to divert their crop to biofuels, thus decreasing food availability and raising food prices.  World Bank officials suggest that biofuel targets should be coordinated with overall crop availability so as to prevent a conflict between food and fuel. But shifting biofuel targets would in turn reduce the incentives for the biofuel industry and perhaps maintain a reliance on petroleum.  How should government level goals and industry production be coordinated with food availability ? Should targets be adjusted to global conditions such a weather conditions (in Russia and China recently) droughts or bug infestation (in Thailand recently) and if so, how can the biofuel industry’s incentives be protected ?

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About aviyer2010

Professor
This entry was posted in Operations Management, Service Operations, Supply Chain Issues and tagged , , , , . Bookmark the permalink.

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