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Impact of United States Corn-Based Ethanol Production on Land Use

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  • Sobowale, Flakkeh
  • Dicks, Michael R.
  • Adam, Brian D.
  • Campiche, Jody L.

Abstract

This study measures the impact of corn-based ethanol production in the United States on land use in other countries, or indirect land use. Indirect land use is a change from non-cropland to cropland (e.g. deforestation) that may occur in response to increasing scarcity of cropland. As farmers worldwide respond to higher crop prices in order to maintain the global food supply and demand balance, pristine lands are cleared and converted to new cropland to replace the crops for feed and food that were diverted elsewhere to biofuel production. The results show that increasing ethanol production in the US has a positive and significant relation to U.S corn price. However, U.S. corn price does not have a significant impact on changes in corn acreage in Brazil and other countries such as Canada, Japan and China. Although many authors have hypothesized that increased ethanol production in the U.S. will increase corn prices, which will result in increased change in land use in other countries, these results suggest that the effect is minimal at best. This is important because although production of ethanol for fuel is often criticized for negatively impacting the environment because of indirect land use, this study was unable to prove the existence of indirect land use.

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Bibliographic Info

Paper provided by Southern Agricultural Economics Association in its series 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama with number 119800.

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Date of creation: 17 Jan 2012
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Handle: RePEc:ags:saea12:119800

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Related research

Keywords: ethanol; indirect land use; Agricultural and Food Policy; Demand and Price Analysis; Land Economics/Use; Marketing;

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References

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  1. Ray, Daryll E. & Moriak, Theo F., 1976. "POLYSIM: A National Agricultural Policy Simulator," Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, issue 1.
  2. Jacinto F. Fabiosa & John C. Beghin & Fengxia Dong & Amani Elobeid & Simla Tokgoz & Tun-Hsiang (Edward) Yu, 2009. "Land Allocation Effects of the Global Ethanol Surge: Predictions from the International FAPRI Model," Food and Agricultural Policy Research Institute (FAPRI) Publications 09-wp488, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  3. Amani Elobeid & Simla Tokgoz & Dermot J. Hayes & Bruce A. Babcock & Chad E. Hart, 2006. "Long-Run Impact of Corn-Based Ethanol on the Grain, Oilseed, and Livestock Sectors: A Preliminary Assessment, The," Center for Agricultural and Rural Development (CARD) Publications 06-bp49, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  4. 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.
  5. Tweeten, Luther G & Quance, C Leroy, 1969. "Positivistic Measures of Aggregate Supply Elasticities: Some New Approaches," American Economic Review, American Economic Association, vol. 59(2), pages 175-83, May.
  6. Randall Reese & Satheesh V. Aradhyula & Jason F. Shogren & Shaine Tyson, 1992. "Biomass as Sustainable Energy: The Potential and Economic Impacts on U.S. Agriculture," Center for Agricultural and Rural Development (CARD) Publications 92-wp92, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  7. Torre Ugarte, Daniel de la & Walsh, Marie E. & Shapouri, Hosein & Slinsky, Stephen P., 2003. "The Economic Impacts of Bioenergy Crop Production on U.S. Crop Production," Agricultural Economics Reports 33997, United States Department of Agriculture, Economic Research Service.
  8. Taylor, Richard D. & Mattson, Jeremy W. & Andino, Jose & Koo, Won W., 2006. "Ethanol'S Impact On The U.S. Corn Industry," Agribusiness & Applied Economics Report 23512, North Dakota State University, Department of Agribusiness and Applied Economics.
  9. Davison, Cecil W. & Crowder, Bradley M., 1991. "Northeast Soybean Acreage Response Using Expected Net Returns," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 20(1), April.
  10. 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 12881, Iowa State University, Department of Economics.
  11. Ahmed, Syud Amer & Thomas Hertel & Ruben Lubowski, 2009. "Calibration of a Land Cover Supply Function Using Transition Probabilities," GTAP Research Memoranda 2947, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  12. Reilly, John M. & Gurgel, Angelo Costa & Paltsev, Sergey, 2008. "Biofuels and Land Use Change," Environmental and Rural Development Impacts Conference, October 15-16, 2008, St. Louis, Missouri 53490, Farm Foundation, Transition to a Bio Economy Conferences.
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