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Impact of US Biofuel Policy on Food Price in South Africa: Implication for Health and Nutrition

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  • Goodness C. Aye

    (Department of Economics, University of Pretoria)

Abstract

This study examines the impact of US biofuel policy on food price in South Africa using monthly time series data from 2002:1 to 2016:2. Analysis based on a battery of cointegration test shows that biofuel policy proxied by biofuel consumption and production are cointegrated with South Africa’s food price. Using the Fully Modified Ordinary Least Square (FMOLS) regression, it is observed that biofuel production and consumption have a positive and significant long run effect of South Africa’s food price. Also results from the error correction model show that biofuel policy has significant positive short run effect on food price in South Africa. Further, both biofuel consumption and production have both long run and short run causal effect on South Africa’s food price. These findings point to the need for appropriate strategies and policies both at the national and global level to ensure that while energy security is guaranteed, this should have a minimized or no adverse effect on food price and food security with the associated health and nutrition implications for consuming households.

Suggested Citation

  • Goodness C. Aye, 2016. "Impact of US Biofuel Policy on Food Price in South Africa: Implication for Health and Nutrition," Working Papers 201657, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:201657
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    More about this item

    Keywords

    United States of America; Biofuel policy; Food price; South Africa; Long run; Short run;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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