Biofuels and economic development in Tanzania
Channing Arndt (),
Karl Pauw and
No 966, IFPRI discussion papers from International Food Policy Research Institute (IFPRI)
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)
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Persistent link: https://EconPapers.repec.org/RePEc:fpr:ifprid:966
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