Interactions Between Biofuel And Food Supply Security In The View Of Price Analysis

There are still some issues associated with the implementation of the Chinese ’non food-based’ policy for the bioethanol production, especially when considering the corn is still the main feedstock resource for the bioethanol production. In this research, the two-way and asymmetrical correlation between the security of food supply and the large-scale production of bioethanol was studied by analyzing interactions between the price of bioethanol and that of food, namely 1)the effect of large-scale bioethanol production on the food production; 2) the effect of the food price on the bioethanol price.The study of interactions between biofuel development and food security, coupled with the evaluation of the current situation as well as the tendency of biofuel and food security were first conducted based on a theoretical framework to comprehensively evaluate the correlation between bioethanol market and food security from the price point of view by applying time-series analysis method. It was found that the price of bioethanol was only influenced by corn prices in the long-term, indicating that the corn is still the bridge that connects the bioethanol production and agricultural products as well as the core of the interaction between them. However, relatively weak correlation exists between the price of bioethanol and that of the other agricultural products, although which have a more fluctuant tendency. In order to provide valuable ideas for the future development of bioethanol in China, the study used simultaneous equation model to analyze the bidirectional relationship between bioethanol and security of food supply. It was found that the exogenous variable which is responsible for the imbalance of supply and demand rather than the competition between energy use and food use of agricultural products is the main factor that leads to the sharp rise in the price of the agricultural products.Considering the international experiences and the current status of relationship between biofuel production and food security, advices including 1)to maintain the current scale of corn-based bioethanol production; 2) to implement the’non food-based’policy for bioethanol production; 3) to adjust access system of the bioethanol industry; 4) to promote the marketization of bioethanol; 5) to increase subsidies for the crop production; 6) to develop bilateral cooperation between China and international cooperators; 7) to moderately increase the import accesses to bioethanol and non-food-based feedstock were made for the development of the development of the bioethanol production based on the secured food supply.