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

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Author Info

  • Elobeid Amani

    (Center for Agricultural and Rural Development (CARD), Iowa State University)

  • Hart Chad

    (Center for Agricultural and Rural Development (CARD), Iowa State University)

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%.

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File URL: http://www.degruyter.com/view/j/jafio.2007.5.2/jafio.2007.5.2.1201/jafio.2007.5.2.1201.xml?format=INT
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Bibliographic Info

Article provided by De Gruyter in its journal Journal of Agricultural & Food Industrial Organization.

Volume (Year): 5 (2007)
Issue (Month): 2 (December)
Pages: 1-23

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Handle: RePEc:bpj:bjafio:v:5:y:2007:i:2:n:6

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Web page: http://www.degruyter.com

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Cited by:
  1. Cloete, Philip C. & Idsardi, Ernst, 2012. "Bio-fuels and Food Security in South Africa: The Role of Indigenous and Traditional Food Crops," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 130172, International Association of Agricultural Economists.
  2. Robert Hahn & Caroline Cecot, 2009. "The benefits and costs of ethanol: an evaluation of the government’s analysis," Journal of Regulatory Economics, Springer, vol. 35(3), pages 275-295, June.
  3. Valeria Costantini & Graziana Dizonno, 2010. "Bioenergy, Agriculture and the Developing Countries," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
  4. Habib-Mintz, Nazia, 2010. "Biofuel investment in Tanzania: Omissions in implementation," Energy Policy, Elsevier, vol. 38(8), pages 3985-3997, August.
  5. Dyer, George A. & Taylor, J. Edward, 2011. "The Corn Price Surge: Impacts on Rural Mexico," World Development, Elsevier, vol. 39(10), pages 1878-1887.
  6. Kamel Louhichi & Hugo Valin, 2012. "Impact of EU biofuel policies on the French arable sector: A micro-level analysis using global market and farm-based supply models," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 93(3), pages 233-272.
  7. Anonymous, 2010. "Journal of International Agricultural Trade and Development, Volume 6, Issue 1," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 6(1).

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