That’s what the renewable fuel lobby says. Mandates can drive up the price of corn, wheat, and soybeans, which benefits farmers who grow those crops. However, higher grain prices hurt farmers who produce beef, pork, poultry, and dairy products, by driving up their input costs.

Farmers who have “bet the farm” to go into the ethanol business may be taken to the cleaners if, as some analysts believe, the ethanol boom is a bubble fated to burst without new mandates and subsidies (see here, here, and here).

Also, what happens to domestic farmers if politically-mandated biofuel targets cannot be met without importing more and more biofuel and bioenergy crops from tropical countries? 

The European Union’s biofuel mandate has shifted capital from EU farmers to plantations in tropical countries, and increased imports of bioenergy crops from those countries. “In terms of production costs and energy yields,” observes the Clean Air Task Force, “European farmers are at a competitive disadvantage in the global energy market.” The same goes for U.S. farmers. As the Task Force explains:

Tropical energy crops get a lot of sunlight and are typically harvested by low-wage manual laborers; most temperate energy crops, in contrast, are harvested by petroleum-powered machines after a relatively short growing season and often require more fertilizers and pesticides. In addition, the cost of land (which along with the cost of labor is a dominant factor in setting the cost of biofuels) is significantly lower in tropical countries with developing economies. Source: Clean Air Task Force, Leaping Before They Looked: Lessons from Europe’s Experience with the 2003 Biofuels Directive, October 2007, p. 8.