The study is conducted in the theoretical premise of macroeconomics among other sub-theoretical domains of significant proximity to the objectives and focus concept of this study. . The premise provides the theoretical components that illuminate an understanding of how economic and macroeconomic policies and factors affect the fuel, food production and distribution dynamics. The theoretical framework also presents macroeconomics analysis and inference tools that will help in the establishment of the 'real world' effects of the production of corn-based ethanol on the price of corn.
Definitions of Terms
Ethanol; is also called ethyl alcohol or pure alcohol is a flammable and colorless liquid which is categorised as a psychoactive drug. In common organic chemistry notation ethanol is abbreviated as EtOh. Hayashi, Fumio (2007) states that ethanol is a pure-chain alcohol with molecular formula C2H5OH.
Ethanol fuel is ethyl alcohol which constitutes the same kind of alcohol that is contained in alcoholic beverages. Ethanol can be used as fuel biofuel like gasoline. This kind can be produced from common crops such as corn and sugar cane. Ethanol is a growing source of renewable energy alterative to gasoline.
Biofuel is a term used to refer to solid, liquid or gas fuel that has been produced from biological or organic material. The kind is differentiated from the fossils fuels which are drawn from long metamorphosed biological material. "From a theoretical perspective Biofuels can be made from any biological carbon source" (Hayashi, Fumio 2007). The commonly used sources of biofuels nonetheless are photosynthetic plants.
This research exercise is not being conducted in a vacuum. The research exercise fits into a broad body of knowledge which has had numerous contributions from various scholars, researchers, professionals and students who have carried similar or related research exercises. Also; the scope and objectives of this research endeavor occur within related and implied theoretical, ideological and philosophical frameworks which largely influence the disciplines of business. As such the researcher is spurred to consider the multiple contributions relevant and related to this research endeavor. The researcher will present a literature review conducted in locating the object of this study within the broader confines of the bodies of knowledge in focus.
The thrust at accomplishing set goals in pursuing the ’green world’ philosophy and theory much based on the need to curtail the towering global climate upheavals has seen the emphasises shift in policy in various industry and agriculture fronts. President George W. Bush has had the production of corn-based ethanol as part of the core of his energy policy. This has brought in some merits and demerits. The resonating concern is that is that the emphasis on corn based ethanol production has adverse impact on the entirety of the national and international agriculture sector. More so the thrust on the production of corn-based ethanol has been the part of the root causes of the escalating food prices.