The Role of Cultivated Land Expansion on the Impacts to Global Agricultural Markets from Biofuels

Jun Yang, Jikun Huang, Siwa Msangi (siwamsangi@gmail.com), Scott Rozelle and Alfons Weersink

No 149614, 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. from Agricultural and Applied Economics Association

Abstract: The emergence of biofuels has led to an increase in crop price and subsequently global food prices but the extent of the impact is subject to debate. Fully understanding the role of biofuels on agricultural markets requires properly accounting for the response of all affected inputs and outputs. Previous studies have generally forced the amount of cultivated land, the largest input, to remain fixed regardless of price change. This study overcomes this limitation by setting alternative growth rates in farmland expansion within a general equilibrium model (GTAP-E) with a focus on agricultural and energy markets. The simulation of the model under alternative biofuel policies and market conditions reveals that a fuller utilization of available land resources significantly reduces the rise in feedstock prices brought about by biofuel policies and/or higher energy prices. Implicit land supply price elasticies calculated by the model are consistent with previous studies and lend support to the approach taken within the study.

Keywords: International Development; Land Economics/Use; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 37
Date: 2013-05
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea13:149614

DOI: 10.22004/ag.econ.149614

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