By boosting the most important source of jobs and economic growth of poorer rural places, farmers and agricultural communities will benefit from the increased rewards for their labour. If the government allows them to keep the gains, the farmers will stand to benefit. In America, the world's biggest agricultural exporter, net farm income this year will be $87 billion, 50% more than the average for the past ten years.
Less wealthy countries that depend on agricultural exports will stand to benefit. Food exporters (such as India, South Africa and Swaziland) will gain from increased export earnings. Countries such as Malawi and Zimbabwe, which used to export food but no longer do so, also stand to gain if they can boost their harvests. Given that commodity prices have been decreasing, this would be an enormous relief to places that have suffered from a relentless decline in their terms of trade.
In emerging markets, an income gap has opened up between cities and countryside over the past few years. As countries have diversified away from agriculture to industries and services, urban wages have outstripped rural ones. Income inequality is conventionally measured using a scale running from zero to one called the Gini coefficient. A score of 0.5 is the mark of a highly unequal society. The Asian Development Bank reckons that China's Gini coefficient rose from 0.41 in 1993 to 0.47 in 2004. If farm incomes in poor countries are increased up by higher food prices, that could mitigate the growing gap between city and countryside.
Increased utilization of renewable biofuels results in significant microeconomic benefits to both the urban and rural sectors contributing to the balance of trade. A study completed in 2001 by the U.S. Department of Agriculture found that an average annual increase of the equivalent of 200 million gallons of soy-based biodiesel demand would boost total crop cash receipts by $5.2 billion cumulatively by 2010, resulting in an average net farm income increase of $300 million per year. The price for a bushel of soybeans would increase by an average of 17 cents annually during the ten-year period.
In addition to being a domestically produced, renewable alternative fuel for diesel engines, biodiesel has positive performance attributes such as increased cetane, high fuel lubricity, and high oxygen content, which may make it a preferred blending stock with future ultra-clean diesel.
Rural economic development in both developed and developing countries is one of the major benefits of biofuel. The increase in farm income and market diversification, reduction of agricultural commodity surpluses, derived support payments, enhancement of international competitiveness, revitalization of retarded rural economies, reduction of negative environmental impacts are some of the important issues related to utilization of biofuel as energy source. The new incomes for farmers and rural population would improve the material welfare of rural communities and can in turn result in a further activation of the local economy. In the end, this will mean a reduction in the emigration rates to urban environments, which affects the rural work populace in many areas of the world.
Certain countries with large endowments of under-utilized lands in the developing world, such as Africa and Latin America, stands to gain from the economic opportunities of foreign investments. To put the land into production will mean introducing a type of infrastructure that, as opposed to the dedicated variety required by extractive industries, will serve to attract other forms of investments, as it boasts lowered transport costs in several regions within the country.