Poor people spend a much bigger share of their overall spending on food than on energy. If the use of food crops for bio-fuels increases, commodity prices Increase, making these crops less accessible to the poor. It is estimated that the rapid increase in, global bio-fuel production will push global corn prices up to 41 per cent, oil-seeds prices to 76 per cent, and wheat prices to 30 per cent by 2020. Thus, these price increases of foods will lead to more expenses in food, and will also affect diet quality and nutrition level.
The rising prices can be successfully handled if crop yield is increased substantially. But what is more important is to frame a pragmatic bio-fuel policy to regulate ethanol production from trees and grasses. These steps will have positive impact on the country’s economic growth.