The present paper analyzes the potential impacts of bio-ethanol expansion on agricultural production, food prices and farmers' incomes in different regions of China. The results show that increase in demand for feedstock to produce bio-ethanol will lead to large increase in the prices of agricultural products. The increase in prices will trigger a significant rise in the production of feedstock at the cost of lower rice and wheat production. The study also reveals that the impacts of bio-ethanol on farmers' incomes vary largely among regions and farmer groups. Given the expected expansion of bio-ethanol production in the future, and the limited land resources for feedstock production in China, the viability of different crops as feedstock for bio-ethanol requires careful analysis before a large-scale expansion of China's bio-ethanol program. Bio-ethanol production in China should be relying more on the second generation of bio-ethanol technologies (i.e. using celluloses to produce bio-ethanol), and China's government should increase research investment in this field. Copyright (c) 2008 The Authors Journal compilation (c) 2008 Institute of World Economics and Politics, Chinese Academy of Social Sciences.
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Article provided by Institute of World Economics and Politics, Chinese Academy of Social Sciences in its journal China & World Economy.