World agriculture is at a turning point, with high demand due to economic growth accelerating food prices. In addition, energy and climate change are re-defining the equations of supply and demand. Biofuels have a high place on the global agenda, largely due to rising concerns about national energy security, higher energy prices, and increasing concerns about global climate change, as well as the income expectations of farmers and other investors (von Braun and Pachauri 2006). The idea of using biofuels is in itself not new, but what is new are the strides in technology development which have facilitated greater access to biofuels such as ethanol, biodiesel and biogas. These strides are far from complete and expectations are high — for example, regarding second-generation technologies where cellulose is converted into ethanol from residues such as stalks and leaves.
The newer forms of biofuels are cleaner and more efficient than traditional forms of biofuel, and a favorable CO2 balance could help mitigate global climate change. This has increased dependency on natural vegetation and crops grown specifically for energy. While further development and use is high on the global political agenda, it is necessary to carefully assess the consequences that this development will have on the poorest of the poor. Biofuel production may introduce new food security risks and new challenges for the poor. This will particularly be the case when natural resource constraints causes greater trade-offs between food production and biofuel production.
In this paper, discussion of the current food and energy situation as well as of the potential of countries to engage in biofuel production will be followed by a review of the opportunities and challenges associated with increased biofuel production. In the conclusion a framework will be suggested for policy and action needed to achieve win–win outcomes in terms of economic development, energy security, and food security for the poor.