This paper examines the effect that biofuels production has had on commodity and global food prices. The innovative … prices, but a much smaller impact on global food prices. Over the past two years (ending June 2008), we estimate that the … prices, they had a much smaller impact on global food prices. Our best estimate suggests that the increase in worldwide …

subsidy spurs global demand for food and confers a terms-of-trade benefit to the food-exporting nation. This might encourage … the food-exporting nation to use a subsidy even if it raises global crude use. The food importer has no such incentive for …