Ethanol Expansion in the Food Versus Fuel Debate: How Will Developing Countries Fare?

Amani Elobeid and Chad Hart

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: This paper examines the impact of ethanol expansion in the United States, brought about by higher crude oil prices, on agricultural commodity prices. Given the United States's stature as a major producer and exporter of many agricultural commodities, the resulting increase in commodity prices has spillover effects into the global market. Using the price changes estimated within a multi-commodity, multi-country agricultural modeling system, this paper attempts to show how an increase in world commodity prices would affect the costs of food baskets around the world and how higher food costs will impact food security, particularly in developing countries. In general, we find that countries where corn is the major food grain experience larger increases in food basket cost while countries where rice is the major food grain have smaller food basket cost increases. Countries where wheat and/or sorghum are the major food grains fall in between. Consequently, the highest percentage increases are seen in Sub-Saharan Africa and Latin America where food basket costs are estimated to increase by at least 10%. The lowest percentage increases are seen in Southeast Asia, with cost increases of less than 2.5%.

Keywords: ethanol; prices; commodity; food (search for similar items in EconPapers)
JEL-codes: Q00 (search for similar items in EconPapers)
Date: 2009-08-19
New Economics Papers: this item is included in nep-agr, nep-ene and nep-sea
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Published in Journal of Agricultural & Food Industrial Organization, December 2007, vol. 5 no. 2

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Journal Article: Ethanol Expansion in the Food versus Fuel Debate: How Will Developing Countries Fare? (2007)
Working Paper: Ethanol Expansion in the Food versus Fuel Debate: How Will Developing Countries Fare? (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:12971

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