Will the development of bioenergy in China create a food security problem? Modeling with fuel ethanol as an example

This paper uses fuel ethanol from corn as an example to establish a theoretical model and framework to explore possible impacts of developing bioenergy on food security in China under short run and long run dynamic equilibriums with import supplements. From the three aspects including “fighting for food with people”, “fighting for land with food”, and international trade safety, the conditions that create food safety problems are discussed. In a closed economy, when the decrease in direct or indirect demand for corn caused by corn price rise is larger than the demand increase due to income increase, or when corn demand increase caused by fuel ethanol price rise is larger than the corn demand decrease caused by the decrease in government price subsidy for fuel ethanol, food security problem will appear. Food security problem can be solved by implementing trade policy when a stable import source is available. Otherwise the subsidies, substitutes, technology, etc. should be used to increase the rate of self-supply. Moreover, considering the status quo of corn market, the paper puts forward a set of policies of income and price subsidy, substitutes, and trade and technology to solve the problems.

► A theoretical model of developing fuel ethanol on food security in China is established.
► The food security will only appear when corn demand increase is caused by fuel ethanol price rise.
► The food security problem can be solved by implementing trade policy.
► Producing fuel ethanol from a variety of resources is a crucial component to achieve food security.