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Biofuels, Poverty, and Growth: A Computable General Equilibrium Analysis of Mozambique

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  • Arndt, Channing
  • Benfica, Rui M.S.
  • Tarp, Finn
  • Thurlow, James
  • Uaiene, Rafael N.

Abstract

This paper assesses the implications of large-scale investments in biofuels for growth and income distribution. We find that biofuels investment enhances growth and poverty reduction despite some displacement of food crops by biofuels. Overall, the biofuel investment trajectory analyzed increases Mozambique’s annual economic growth by 0.6 percentage points and reduces the incidence of poverty by about six percentage points over a 12-year phase-in period. Benefits depend on production technology. An outgrower approach to producing biofuels is more pro-poor, due to the greater use of unskilled labor and accrual of land rents to smallholders, compared with the more capital-intensive plantation approach. Moreover, the benefits of outgrower schemes are enhanced if they result in technology spillovers to other crops. These results should not be taken as a green light for unrestrained biofuels development. Rather, they indicate that a carefully designed and managed biofuels policy holds the potential for substantial gains.

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Bibliographic Info

Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 52004.

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Date of creation: 2008
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Handle: RePEc:ags:iaae09:52004

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Keywords: bio-fuels; growth; poverty; Mozambique; Africa; Agricultural and Food Policy; International Development; Resource /Energy Economics and Policy;

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  1. Channing Arndt & Kenneth R. Simler, 2007. "Consistent poverty comparisons and inference," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2-3), pages 133-139, 09.
  2. Tarp, Finn, 2006. "Aid and Development," MPRA Paper 13171, University Library of Munich, Germany.
  3. Channing Arndt & Robert C. James & Kenneth R. Simler, 2006. "Has Economic Growth in Mozambique been Pro-Poor?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(4), pages 571-602, December.
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Cited by:
  1. Negash, Martha, 2012. "Biofuels and Food Security: Micro-evidence from Ethiopia," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126793, International Association of Agricultural Economists.
  2. Cororaton, Caesar B. & Timilsina, Govinda R. & Mevel, Simon, 2010. "Impacts Of Large Scale Expansion Of Biofuels On Global Poverty And Income Distribution," Proceedings Issues, 2010: Climate Change in World Agriculture: Mitigation, Adaptation, Trade and Food Security, June 2010, Stuttgart- Hohenheim, Germany 91279, International Agricultural Trade Research Consortium.
  3. Arndt, Channing & Benfica, Rui & Thurlow, James, 2011. "Gender Implications of Biofuels Expansion in Africa: The Case of Mozambique," World Development, Elsevier, vol. 39(9), pages 1649-1662, September.
  4. Arndt, Channing & Pauw, Karl & Thurlow, James, 2010. "Biofuels and economic development in Tanzania," IFPRI discussion papers 966, International Food Policy Research Institute (IFPRI).
  5. Hvid, Anna Kirstine & Henningsen, Geraldine Adrienne, 2014. "A new scramble for land or an unprecedented opportunity for the rural poor? Distributional consequences of increasing land rents in developing countries," MPRA Paper 52919, University Library of Munich, Germany.
  6. Hannah Schuerenberg-Frosch, 2012. "How to model a child in school? A dynamic macro-simulation study for Tanzania," EcoMod2012 4159, EcoMod.
  7. Arndt, Channing & Thurlow, James, 2009. "Inequality and Poverty Impacts of Trade Distortions in Mozambique," Agricultural Distortions Working Paper 52794, World Bank.
  8. McDougal, Topher & Caruso, Raul, 2013. "Wartime Violence and Post-Conflict Development Policy: The Case of Agricultural Concessions in Mozambique," NEPS Working Papers 1/2013, Network of European Peace Scientists.
  9. Negash, Martha & Swinnen, Johan F.M., 2013. "Biofuels and food security: Micro-evidence from Ethiopia," Energy Policy, Elsevier, vol. 61(C), pages 963-976.
  10. Vitezslav Pisa & Jan Bruha & Vitezslav Pisa, 2011. "Dynamics of the Commodity Prices and Quantities: An Analysis using a Dynamic Multiregional CGE Model," EcoMod2011 2889, EcoMod.
  11. Resnick, Danielle & Tarp, Finn & Thurlow, James, 2012. "The Political Economy of Green Growth: Illustrations from Southern Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  12. Mabiso, Athur, 2012. "Participation of Smallholder Farmers in Biofuels Crop and Land Rental Markets: Evidence from South Africa," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126370, International Association of Agricultural Economists.
  13. Huang, Jikun & Yang, Jun & Msangi, Siwa & Rozelle, Scott & Weersink, Alfons, 2012. "Biofuels and the poor: Global impact pathways of biofuels on agricultural markets," Food Policy, Elsevier, vol. 37(4), pages 439-451.
  14. Channing Arndt & M. Azhar Hussain & E. Samuel Jones & Virgulino Nhate & Finn Tarp & James Thurlow, 2011. "Explaining Poverty Evolution: The Case of Mozambique," Working Paper Series UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).

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