Farmers’ Switchgrass Adoption Decision Under A Single-Procurer Market: An Agent Based Simulation Approach

Haoyang Li and Brent R. Ross

No 170502, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: Recently, a number of pilot and demonstration scale advanced biofuel facilities have been established, but commercial scale facilities are yet to become operational. To make informed decisions about this emerging industry, potential biorefinery entrepreneurs and regional policy makers need analysis of how farmers are willing to adopt these feedstocks and how will they switch land into bio-feedstock use to ensure a stable feedstock supply. This paper develops an agent-based simulation model to study farmers’ switchgrass adoption decisions over time within a specific agricultural region. We explicitly examine the effect of various contractual terms across market scenarios and consider the potential for contractual hold-ups. Results show that a contract with a payment of $175/acre plus $50/ton could make both biorefinery and farmer profitable during the simulation period. It is also shown that alfalfa, but not annual crops will be the mostly affected crop (replaced) by the introduction of switchgrass in the region of North Michigan.

Keywords: Agribusiness; Industrial Organization; Land Economics/Use (search for similar items in EconPapers)
Pages: 35
Date: 2014
New Economics Papers: this item is included in nep-agr and nep-cmp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/170502/files/F ... ation%20Approach.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:170502

DOI: 10.22004/ag.econ.170502

Access Statistics for this paper

More papers in 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().