The Impact of Rising Ethanol Production on the Brazilian Market for Basic Food Commodities: An Econometric Assessment

Anelise Rahmeier Seyffarth ()
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Anelise Rahmeier Seyffarth: University of Oldenburg

Environmental & Resource Economics, 2016, vol. 64, issue 3, No 8, 536 pages

Abstract: Abstract The controversial debate on the impacts of rising biofuel production on food commodity markets is of great policy relevance in Brazil. This paper contributes to the discussion by applying panel data regression models with fixed effects using OLS. Our dataset comprises annual production/harvested area data for sugar, ethanol and five other staple commodities ranging from 1981 to 2009 for 24 Brazilian states. Our results indicate that rising ethanol production exerts statistically significant positive impacts on sugarcane; negative impacts on rice, beans and soybeans acreage but no statistically significant effect on the areas for corn and manioc. The negative impacts on commodities’ acreage have implications for the associated prices. Ceteris paribus, rising ethanol production puts some upward pressure on the prices for rice, beans and soybeans. However, the economic implication of these direct land use effects is attenuated due to the moderate scale of any effect.

Keywords: Agricultural land; Biofuels; Fixed effects models; Panel data; Staple commodities (search for similar items in EconPapers)
JEL-codes: C23 Q15 Q16 (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1007/s10640-015-9881-5

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