India Turns to Jatropha for Biofuel

With inflation running at 11 per cent and the Reserve Bank of India stepping in this week to increase the REPO by 50 basis points at the end of August, the country is looking hard at the impact of biofuel production on food grain prices.

According to New America Media, the Indian prime minister recently rejected production of biofuel from food grain and also moves to turn sugar production into ethanol production.

Prime Minister Manmohan Singh is concerned that production of fuel from grain would deepen the food/fuel crisis.

However, the country is faced with rising crude oil costs and also grain price inflation.

New America Media said that India’s Finance Minister P. Chidambaram also recently criticized conversion of crops into bio-fuel as the single biggest reason why we are facing this (food) crisis.

And he attacked the US for their backing of corn-based ethanol and also other biofuel production from palm oil.

The concern that food grains could be switched to biofuel production has led the Indian government to now look at jatropha plantations on waste land as the alternative method of producing fuels - a system that has already been set up by the Philippine government.

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