cropcircles Agflation is when the price of food grains increase due to an increase in consumption of these food grains for the production of bio-fuels.

This phenomenon usually affects grains like corn and soya bean, but the effect will spill over to other grains also due to the increased consumption of these grains. As the price for corn increases the demand for it will fall, automatically increasing the demand for say rice, as the populace now requires a substitute. This will also effect livestock prices as these bio-fuel capable grains are also used as feed.

As prices increases, farmers will opt in for the cultivation of the crop yielding more profit and the land under cultivation for these bio-fuel crops will increase creating a shortage of other grains.

Over time with the overall increase in price of the grains, the demand for both will balance out and ideally should lead to a situation where there will be more or less equal areas of land under cultivation for both types of crops.

But it remains to be seen who wins…the hunger for food, or the hunger for cleaner fuel.