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Effects of biogas production on inter- and in-farm competition


  • Ostermeyer, Arlette
  • Schonau, Franziska


Biogas production is one of the influential innovations of recent decades in German agriculture. Due to high guaranteed energy prices biogas production led to distortions in agricultural and land markets. This paper provides insights in effects of biogas production on farms, farm structures and rural areas for the region Altmark, Germany, for the period 2012-2026 by using the agent-based simulation model AgriPoliS. AgriPoliS enables to simulate agricultural structural change and impacts of policies based on a linear programming approach. To maximize the household-income, farm agents can invest, produce and compete against each other on the land rental market. To analyse effects of biogas production, biogas plants, possible substrate mixtures and feed-in remunerations are introduced in the model. In our analyses, we focus on 1) the choice of production of farms, 2) the competition between farms, and 3) impacts on rural areas including environmental issues and labour market. Our simulation results show that biogas production provides especially for farmers with high management capabilities and large farms a profitable income opportunity. On average, biogas farms cannot increase their profitability. As result of an increased value added through biogas production and high competition among farms, rental prices increase and thus a high share of the value added is transferred to the land owners. Biogas production leads to an intensification of land use, especially to increases in cultivation of grass and maize silage instead of meadows and other crops, and in livestock production. This may cause negative environmental effects. On the other hand both, the intensification and the biogas production have positive effects on the labour market as biogas farms have an additional workforce demand.

Suggested Citation

  • Ostermeyer, Arlette & Schonau, Franziska, 2012. "Effects of biogas production on inter- and in-farm competition," 131st Seminar, September 18-19, 2012, Prague, Czech Republic 135772, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa131:135772

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    References listed on IDEAS

    1. Happe, Kathrin & Balmann, Alfons & Kellermann, Konrad & Sahrbacher, Christoph, 2008. "Does structure matter? The impact of switching the agricultural policy regime on farm structures," Journal of Economic Behavior & Organization, Elsevier, vol. 67(2), pages 431-444, August.
    2. Balmann, Alfons & Happe, Kathrin & Kellermann, Konrad & Kleingarn, Anne, 2001. "Adjustment Costs Of Agri-Environmental Policy Switchings - A Multi-Agent Approach," 2001 Annual meeting, August 5-8, Chicago, IL 20506, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Habermann, Hendrik & Breustedt, Gunnar, 2011. "Einfluss der Biogaserzeugung auf landwirtschaftliche Pachtpreise in Deutschland," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 60(2).
    4. Kilian, Stefan & Anton, Jesus & Roder, Norbert & Salhofer, Klaus, 2008. "Impacts Of 2003 Cap Reform On Land Prices: From Theory To Empirical Results," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44808, European Association of Agricultural Economists.
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    Cited by:

    1. Oniszk-Popławska, Anna & Matyka, Mariusz & Ryńska, Elżbieta Dagny, 2014. "Evaluation of a long-term potential for the development of agricultural biogas plants: A case study for the Lubelskie Province, Poland," Renewable and Sustainable Energy Reviews, Elsevier, vol. 36(C), pages 329-349.
    2. Eugenio Demartini & Anna Gaviglio & Marco Gelati & Daniele Cavicchioli, 2016. "The Effect of Biogas Production on Farmland Rental Prices: Empirical Evidences from Northern Italy," Energies, MDPI, Open Access Journal, vol. 9(11), pages 1-23, November.

    More about this item


    biogas production; agricultural production; agent-based model AgriPoliS; land rental prices; Agribusiness; Agricultural and Food Policy;

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