IDEAS home Printed from https://ideas.repec.org/a/wly/apecpp/v41y2019i1p37-55.html
   My bibliography  Save this article

Ethanol Plant Location and Land Use: A Case Study of CRP and the Ethanol Mandate

Author

Listed:
  • Jennifer Ifft
  • Deepak Rajagopal
  • Ryan Weldzuis

Abstract

This study uses a county‐level difference‐in‐difference framework to estimate the share of re‐enrollment into the Conservation Reserve Program (CRP) in response to local ethanol production capacity after the Renewable Fuels Standard (RFS). Relatively more land remained in CRP in ethanol‐intensive areas after the RFS. This seemingly counter‐intuitive result can be explained by post‐RFS changes to the CRP that favored ethanol‐intensive areas. Both CRP design changes and production trends correlated with ethanol plant location pose challenges for empirical strategies that use ethanol plant location to study production or land use decisions. Changes to CRP policies can play an important role in participation and land use decisions.

Suggested Citation

  • Jennifer Ifft & Deepak Rajagopal & Ryan Weldzuis, 2019. "Ethanol Plant Location and Land Use: A Case Study of CRP and the Ethanol Mandate," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(1), pages 37-55, March.
    • Handle: RePEc:wly:apecpp:v:41:y:2019:i:1:p:37-55
    DOI: 10.1093/aepp/ppy007
    as

    Download full text from publisher

    File URL: https://doi.org/10.1093/aepp/ppy007
    Download Restriction: no
    File URL: https://libkey.io/10.1093/aepp/ppy007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ben H. Blomendahl & Richard K. Perrin & Bruce B. Johnson, 2011. "The Impact of Ethanol Plants on Surrounding Farmland Values: A Case Study," Land Economics, University of Wisconsin Press, vol. 87(2), pages 223-232.
    2. Harry Gorter & Dusan Drabik & David R. Just, 2015. "A Forensic Analysis of the Food Commodity Price Boom of 2008," Palgrave Studies in Agricultural Economics and Food Policy, in: The Economics of Biofuel Policies, chapter 0, pages 67-84, Palgrave Macmillan.
    3. Kanlaya J. Barr & Bruce A. Babcock & Miguel A. Carriquiry & Andre M. Nassar & Leila Harfuch, 2011. "Agricultural Land Elasticities in the United States and Brazil," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(3), pages 449-462.
    4. Christopher L. Gilbert, 2010. "How to Understand High Food Prices," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(2), pages 398-425, June.
    5. Miao, Ruiqing, 2013. "Impact of Ethanol Plants on Local Land Use Change," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(2), pages 1-19, August.
    6. Fatal, Yehushua S. & Thurman, Walter N., 2014. "The Response of Corn Acreage to Ethanol Plant Siting," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(2), pages 1-15, May.
    7. Hellerstein, Daniel & Higgins, Nathaniel & Roberts, Michael, 2015. "Options for Improving Conservation Programs: Insights From Auction Theory and Economic Experiments," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, issue 01, pages 1-1, February.
    8. Chen, Xiaoguang & Khanna, Madhu, 2018. "Effect of corn ethanol production on Conservation Reserve Program acres in the US," Applied Energy, Elsevier, vol. 225(C), pages 124-134.
    9. Kevin McNew & Duane Griffith, 2005. "Measuring the Impact of Ethanol Plants on Local Grain Prices," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(2), pages 164-180.
    10. Jaclyn Kropp & Janet G. Peckham, 2015. "US agricultural support programs and ethanol policies effects on farmland values and rental rates," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 75(2), pages 169-193, July.
    11. Wachenheim, Cheryl J. & Lesch, William C. & Dhingra, Neeraj, 2014. "The Conservation Reserve Program: A Literature Review," Agribusiness & Applied Economics Report 164829, North Dakota State University, Department of Agribusiness and Applied Economics.
    12. Harry Gorter & Dusan Drabik & David R. Just, 2015. "The Economics of Biofuel Policies," Palgrave Studies in Agricultural Economics and Food Policy, Palgrave Macmillan, number 978-1-137-41485-4, August.
    13. Wu, JunJie & Weber, Bruce, 2012. "Implications of a Reduced Conservation Reserve Program," C-FARE Reports 156625, Council on Food, Agricultural, and Resource Economics (C-FARE).
    14. Charles Towe & Constant I. Tra, 2013. "Vegetable Spirits and Energy Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(1), pages 1-16.
    15. Hendricks, Nathan P. & Er, Emrah, 2018. "Changes in cropland area in the United States and the role of CRP," Food Policy, Elsevier, vol. 75(C), pages 15-23.
    16. Harry Gorter & Dusan Drabik & David R. Just, 2015. "The Economics of Developing Country Policy Responses and Biofuel Policies," Palgrave Studies in Agricultural Economics and Food Policy, in: The Economics of Biofuel Policies, chapter 0, pages 109-119, Palgrave Macmillan.
    17. Swinton, Scott M. & Babcock, Bruce A. & James, Laura K. & Bandaru, Varaprasad, 2011. "Higher US crop prices trigger little area expansion so marginal land for biofuel crops is limited," Energy Policy, Elsevier, vol. 39(9), pages 5254-5258, September.
    18. Constant I. Tra & Charles A. Towe, 2016. "The implications of the US renewable fuel standard programme for farm structure," Applied Economics, Taylor & Francis Journals, vol. 48(8), pages 712-722, February.
    19. Kevin McNew & Duane Griffith, 2005. "Measuring the Impact of Ethanol Plants on Local Grain Prices," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(2), pages 164-180.
    20. Gaurav Arora & Peter T. Wolter & Hongli Feng & David A. Hennessy, 2016. "Role of Ethanol Plants in Dakotas Land Use Change: Incorporating Flexible Trends in the Difference-in-Difference Framework with Remotely-Sensed Data," Center for Agricultural and Rural Development (CARD) Publications 16-wp564, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    21. Searchinger, Timothy & Heimlich, Ralph & Houghton, R. A. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Tokgoz, Simla & Hayes, Dermot J. & Yu, Hun-Hsiang, 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change," Staff General Research Papers Archive 12881, Iowa State University, Department of Economics.
    22. Swinton, Scott & Babcock, Bruce A. & James, Laura K. & Bandaru, Varaprasad, 2011. "Higher U.S. Crop Prices Trigger Little Area Expansion So Marginal Land for Biofuels is Limited," Staff General Research Papers Archive 34897, Iowa State University, Department of Economics.
    23. Mesbah Motamed & Lihong McPhail & Ryan Williams, 2016. "Corn Area Response to Local Ethanol Markets in the United States: A Grid Cell Level Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(3), pages 726-743.
    24. Jason Henderson & Brent A. Gloy, 2009. "The impact of ethanol plants on cropland values in the great plains," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 69(1), pages 36-48, May.
    25. Krumel, Thomas P Jr & Wallander, Steven & Hellerstein, Daniel, 2015. "Federal Programs in Conflict: Does Ethanol Plant Location Cause Early Exits in the Conservation Reserve Program?," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205364, Agricultural and Applied Economics Association.
    26. Barr, Kanlaya Jintanakul, 2011. "Agricultural Land Elasticities in the United States and Brazil," Staff General Research Papers Archive 34893, Iowa State University, Department of Economics.
    27. Sarah A. Low & Andrew M. Isserman, 2009. "Ethanol and the Local Economy," Economic Development Quarterly, , vol. 23(1), pages 71-88, February.
    28. Khanna, M., 2018. "Effect of Corn Ethanol Production on Conservation Reserve Program Acres in the US," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277014, International Association of Agricultural Economists.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Junpyo Park, 2022. "Distance to Biorefinery Plants and Its Influence on Agricultural Land Value: Evidence from the United States Midwest Region," Land, MDPI, vol. 11(9), pages 1-14, September.
    2. Sampson, Gabriel S. & Al-Sudani, Amer & Bergtold, Jason, 2021. "Local irrigation response to ethanol expansion in the High Plains Aquifer," Resource and Energy Economics, Elsevier, vol. 66(C).
    3. Austin, K.G. & Jones, J.P.H. & Clark, C.M., 2022. "A review of domestic land use change attributable to U.S. biofuel policy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 159(C).
    4. Kim, Youngho, 2023. "Payments for Ecosystem Services Programs and Climate Change Adaptation in Agriculture," 2023 Annual Meeting, July 23-25, Washington D.C. 335971, Agricultural and Applied Economics Association.
    5. Ani L. Katchova & Ana Claudia Sant’Anna, 2019. "Impact of Ethanol Plant Location on Corn Revenues for U.S. Farmers," Sustainability, MDPI, vol. 11(22), pages 1-13, November.
    6. Cornish, Brian & Miao, Ruiqing & Khanna, Madhu, 2020. "How will changes in Title II of the 2018 Farm Bill affect CRP Acreage?," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304304, Agricultural and Applied Economics Association.
    7. Adjei, Eugene & Hartarska, Valentina M., 2022. "An Impact Analysis of the Transition Incentive Program on Beginning Farmers and Ranchers in Rural United States," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322506, Agricultural and Applied Economics Association.
    8. Brian Cornish & Ruiqing Miao & Madhu Khanna, 2022. "Impact of changes in Title II of the 2018 Farm Bill on the acreage and environmental benefits of Conservation Reserve Program," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(2), pages 1100-1122, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ifft, Jennifer & Rajagopal, Deepak & Ryan, Weldzius, 2016. "The effect of the ethanol mandate on the Conservation Reserve Program," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236178, Agricultural and Applied Economics Association.
    2. Austin, K.G. & Jones, J.P.H. & Clark, C.M., 2022. "A review of domestic land use change attributable to U.S. biofuel policy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 159(C).
    3. Junpyo Park, 2022. "Distance to Biorefinery Plants and Its Influence on Agricultural Land Value: Evidence from the United States Midwest Region," Land, MDPI, vol. 11(9), pages 1-14, September.
    4. Gardner, Grant & Sampson, Gabriel S., 2022. "Land Value Impacts of Ethanol Market Expansion by Irrigation Status," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(3), September.
    5. Sampson, Gabriel & Gardner, Grant, 2021. "Land Value Impacts of Ethanol Market Expansion Differ by Irrigation Status," 2021 Annual Meeting, August 1-3, Austin, Texas 313854, Agricultural and Applied Economics Association.
    6. Hendricks, Nathan P. & Sinnathamby, Sumathy & Douglas-Mankin, Kyle & Smith, Aaron & Sumner, Daniel A. & Earnhart, Dietrich H., 2014. "The environmental effects of crop price increases: Nitrogen losses in the U.S. Corn Belt," Journal of Environmental Economics and Management, Elsevier, vol. 68(3), pages 507-526.
    7. Junpyo Park & John Anderson & Eric Thompson, 2019. "Land-Use, Crop Choice, and Proximity to Ethanol Plants," Land, MDPI, vol. 8(8), pages 1-14, July.
    8. Yanbing Wang & Michael S. Delgado & Juan Sesmero & Benjamin M. Gramig, 2020. "Market Structure and the Local Effects of Ethanol Expansion on Land Allocation: A Spatially Explicit Analysis," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(5), pages 1598-1622, October.
    9. Gaurav Arora & Peter T. Wolter & Hongli Feng & David A. Hennessy, 2016. "Role of Ethanol Plants in Dakotas Land Use Change: Incorporating Flexible Trends in the Difference-in-Difference Framework with Remotely-Sensed Data," Center for Agricultural and Rural Development (CARD) Publications 16-wp564, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    10. Ani L. Katchova & Ana Claudia Sant’Anna, 2019. "Impact of Ethanol Plant Location on Corn Revenues for U.S. Farmers," Sustainability, MDPI, vol. 11(22), pages 1-13, November.
    11. Sharp, Benjamin E. & Miller, Shelie A., 2014. "Estimating maximum land use change potential from a regional biofuel industry," Energy Policy, Elsevier, vol. 65(C), pages 261-269.
    12. John L. Pender & Jeremy G. Weber & Jason P. Brown, 2014. "Sustainable Rural Development and Wealth Creation," Economic Development Quarterly, , vol. 28(1), pages 73-86, February.
    13. Chen, Xiaoguang & Khanna, Madhu, 2018. "Effect of corn ethanol production on Conservation Reserve Program acres in the US," Applied Energy, Elsevier, vol. 225(C), pages 124-134.
    14. P. A. Turner & C. B. Field & D. B. Lobell & D. L. Sanchez & K. J. Mach, 2018. "Unprecedented rates of land-use transformation in modelled climate change mitigation pathways," Nature Sustainability, Nature, vol. 1(5), pages 240-245, May.
    15. Liu, Bing & Hudson, Darren & Farmer, Michael, 2015. "The Impact of a Sorghum-Based Ethanol Plant on Local Cotton Acreage: A Spatial Approach," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229799, Southern Agricultural Economics Association.
    16. Arora, Gaurav & Wolter, Peter T. & Feng, Hongli & Hennessy, David A., 2015. "Role of Ethanol Plants in Dakotas’ Land Use Change: Analysis Using Remotely Sensed Data," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 206565, Agricultural and Applied Economics Association.
    17. Stevens, Andrew, 2015. "Fueling Local Water Pollution: Ethanol Refineries, Land Use, and Nitrate Runoff," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205741, Agricultural and Applied Economics Association.
    18. Stevens, Andrew W., 2021. "Ethanol Refineries and Local Land Use," 2021 Conference, August 17-31, 2021, Virtual 315304, International Association of Agricultural Economists.
    19. Rezwanul Parvez & David C Roberts & David Ripplinger, 2017. "Factors Impacting Crop Acreage Decision: A Case Study of North Dakota Agriculture," Agricultural Development, Sophia, vol. 1(1), pages 16-36.
    20. Piroli, Giuseppe & Ciaian, Pavel & Kancs, d'Artis, 2012. "Land use change impacts of biofuels: Near-VAR evidence from the US," Ecological Economics, Elsevier, vol. 84(C), pages 98-109.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:apecpp:v:41:y:2019:i:1:p:37-55. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)2040-5804 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.