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The impact of Australian ethanol policy on agriculture: examining limiting factors

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  • Cuevas-Cubria, Clara

Abstract

Government subsidies have fuelled proposals for new ethanol projects that plan to use Australian grains as their feedstock. Additional ethanol production will intensify competition for grain in the Australian market, particularly during drought periods. This is likely to affect Australia’s largest grain user, the livestock industry. Past empirical work has found that expansions to ethanol production will cause grain prices to increase, as a result of restrictions on grain imports. However, this study finds two factors that could moderate such increases in the price of grain: the reliance of ethanol producers on low cost feedstock to remain economically viable, and the possibility of using imported cassava instead of domestically produced grains for ethanol production.

Suggested Citation

  • Cuevas-Cubria, Clara, 2012. "The impact of Australian ethanol policy on agriculture: examining limiting factors," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 124280, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare12:124280
    DOI: 10.22004/ag.econ.124280
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    1. 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.
    2. Simla Tokgoz & Amani Elobeid & Jacinto F. Fabiosa & Dermot J. Hayes & Bruce A. Babcock & Tun-Hsiang (Edward) Yu & Fengxia Dong & Chad E. Hart & John C. Beghin, 2007. "Emerging Biofuels: Outlook of Effects on U.S. Grain, Oilseed, and Livestock Markets," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 07-sr101, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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