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Biofuels and economic development in Tanzania

Channing Arndt (), Karl Pauw and James Thurlow

No 966, IFPRI discussion papers from International Food Policy Research Institute (IFPRI)

Abstract: Biofuels provide a new opportunity to enhance economic development in Tanzania. Drawing on detailed cost estimates, we develop a dynamic computable general equilibrium model to estimate the impact of different biofuel production scenarios on growth and poverty. Our results indicate that maximizing the poverty-reducing effects of a biofuels industry in Tanzania requires engaging and improving the productivity of smallholder farmers. Evidence shows that cassava-based ethanol production is more profitable than other feedstock options. Our findings also indicate that cassava generates higher levels of pro-poor growth than do sugarcane-based systems. However, if smallholder yields can be improved rather than expanding cultivated land, then sugarcane and cassava outgrower schemes can produce similar pro-poor outcomes. We conclude that in so far as the public investments needed to establish a biofuels industry in Tanzania are in accordance with national development plans, producing biofuels will contribute to achieving the countrys overall development objectives.

Keywords: Biofuels; Cassava; Computable general equilibrium (CGE) model; Growth; Poverty (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-afr, nep-agr, nep-cmp and nep-ene
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