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Biofuels, poverty, and growth: A computable general equilibrium analysis of Mozambique

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  • Arndt, Channing
  • Benfica, Rui
  • Tarp, Finn
  • Thurlow, James
  • Uaiene, Rafael

Abstract

"Large private investments in biofuels are presently underway in Mozambique. This paper uses an economywide model to assess the implications of these investments for growth and income distribution. Our results indicate that biofuels provide an opportunity to enhance growth and poverty reduction. Overall, the proposed biofuel investments increase Mozambique's annual economic growth by 0.6 percentage points and reduce the incidence of poverty by about six percentage points over the 12-year phase-in period. However, the benefits depend on production technology. Our results indicate that 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 in this system, compared with the more capital-intensive plantation approach. Moreover, the expected benefits of outgrower schemes will be further enhanced if they result in technology spillovers to other crops." from authors' abstract

Suggested Citation

  • Arndt, Channing & Benfica, Rui & Tarp, Finn & Thurlow, James & Uaiene, Rafael, 2008. "Biofuels, poverty, and growth: A computable general equilibrium analysis of Mozambique," IFPRI discussion papers 803, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:803
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    References listed on IDEAS

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    1. Lence, Sergio H & Miller, Douglas J, 1998. "Estimation of Multi-output Production Functions with Incomplete Data: A Generalised Maximum Entropy Approach," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 25(2), pages 188-209.
    2. Finn Tarp, 2006. "Aid and Development," Discussion Papers 06-12, University of Copenhagen. Department of Economics.
    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, vol. 15(4), pages 571-602, December.
    4. Richard E. Just & David Zilberman & Eithan Hochman & Ziv Bar-Shira, 1990. "Input Allocation in Multicrop Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(1), pages 200-209.
    5. 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, September.
    6. Amos Golan & Stephen Vogel, 2000. "Estimation of Non-Stationary Social Accounting Matrix Coefficients with Supply-Side Information," Economic Systems Research, Taylor & Francis Journals, vol. 12(4), pages 447-471.
    7. Robinson, Sherman & Cattaneo, Andrea & El-Said, Moataz, 1998. "Estimating a social accounting matrix using cross entropy methods:," TMD discussion papers 33, International Food Policy Research Institute (IFPRI).
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    Keywords

    Biofuels; economic growth; Poverty; Developing countries;
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