The Biomass Crop Assistance Program: Critical, Notional, or Distortional Support for Cellulosic Biofuels?

Ruiqing Miao and Madhu Khanna

No 205818, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: This study intends to quantify the impacts of the Biomass Crop Assistance Program (BCAP) on biomass production and on land use. With a focus on corn, corn stover, soybeans, miscanthus, and switchgrass, we investigate farmers’ optimal land allocation among these five crops or biomass feedstock across 1,836 counties in the rain-fed area of the United States under various assumptions about farmers’ time and risk preferences as well as credit constraint status. The results show that under its current budget ($125 million within five years), BCAP only has a moderate effect on incentivizing biomass production (up to 4.8 million metric tons per year). BCAP’s impact on biomass production first increases then decreases in biomass price. The impact peaks when biomass price is $30 to $40 per metric ton. We also find that BCAP incentivizes biomass production on low quality land much more than production on high quality land. The geographical distribution of BCAP payments and of land use change caused by BCAP is studied as well.

Keywords: Crop Production/Industries; Land Economics/Use; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 41
Date: 2015-05-27
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205818

DOI: 10.22004/ag.econ.205818

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