Researchers at the Overseas Development Institute have argued that biofuels could help reduce poverty in the developing world. Some increased employment, wider economic growth multipliers and energy price effects. However, this potential is described as 'fragile'. The potential is also reduced where feedstock production tends to be of large scale, or causes pressure on limited agricultural resources: capital investment, land, water and the net cost of food for the poor.
With regards to the potential for poverty reduction or exacerbation, biofuels rely on many of the same policy, regulatory or investment shortcomings that impede agriculture as a route to poverty reduction. Since many of these shortcomings require policy improvements at a country level rather than a global one, thus they argue for a country-by-country analysis of the potential poverty impacts of biofuels. This would consider land administration systems, market coordination and prioritizing investment in biodiesel, as this 'generates more labour, has lower transportation costs and uses simpler technology'.