Sustainable Biofuels, Marginal Agricultural Lands, and Farm Supply Response: Micro-Evidence for Southwest Wisconsin
Recent policy and research initiatives aim to make sustainable biofuel crops an important component of the nation’s agricultural and energy sectors, yet few studies have explored potential supply response at the farm level using survey information. This article utilizes contingent valuation (CV) data gathered from farmers in southwestern Wisconsin to assess the region’s near-term supply response to corn stover and switchgrass crop technologies. The ex ante supply model identifies characteristics that distinguish likely early innovators and provides response estimates. The econometric results reveal a relatively inelastic short-run supply, but some heterogeneity in reservation price across farm types and attitudes suggests that spatial biofuels agglomerations or ‘hot spots’ could be pursued.
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