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The Cost to Mexico of U.S. Corn Ethanol Expansion

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  • Wise, Timothy A.

Abstract

More than 40% of U.S. corn is now consumed in the production of ethanol. With the United States by far the world’s largest producer and exporter of corn, this represents an estimated 15% of global corn production. A recent survey by the National Academy of Sciences estimated that globally biofuels expansion accounted for 20-40% of the price increases seen in 2007-8, when prices of many food crops doubled. This had a dramatic impact on poor consumers and on net-food-importing developing countries. Expanding U.S. production and consumption of corn-based ethanol, which has been encouraged by a range of U.S. government subsidies and incentives, is considered one of the most important biofuel programs in putting upward pressure on food prices. Mexico now imports about one-third of its corn from the United States. Using conservative estimates from a study on U.S. ethanol expansion and corn prices, we estimate the direct impacts of U.S. ethanol expansion on Mexican corn import costs. We find that from 2006-2011, U.S. ethanol expansion cost Mexico about $1.5 billion due to ethanol-related corn price increases. Other methodologies suggest the costs could be more than twice as high, surpassing $3 billion over the period.

Suggested Citation

  • Wise, Timothy A., 2012. "The Cost to Mexico of U.S. Corn Ethanol Expansion," Working Papers 179098, Tufts University, Global Development and Environment Institute.
    • Handle: RePEc:ags:tugdwp:179098
    DOI: 10.22004/ag.econ.179098
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    References listed on IDEAS

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    Cited by:

    1. Serafin Corral & David Romero Manrique de Lara & Marisa Tejedor Salguero & Carmen Concepción Jimenez Mendoza & David Legna-de la Nuez & María Dorta Santos & Francisco Díaz Peña, 2016. "Assessing Jatropha Crop Production Alternatives in Abandoned Agricultural Arid Soils Using MCA and GIS," Sustainability, MDPI, vol. 8(6), pages 1-16, May.
    2. Timothy A. Wise, 2012. "The Cost to Mexico of U.S. Corn Ethanol Expansion," GDAE Working Papers 12-01, GDAE, Tufts University.
    3. Jennifer Clapp, 2017. "Responsibility to the rescue? Governing private financial investment in global agriculture," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 34(1), pages 223-235, March.
    4. Boly, Mohamed & Sanou, Aicha, 2022. "Biofuels and food security: evidence from Indonesia and Mexico," Energy Policy, Elsevier, vol. 163(C).
    5. Shouvik Chakraborty, 2015. "Explaining the Rise in Agricultural Prices: Impact of Neoliberal Policies on the Agrarian Economy," Agrarian South: Journal of Political Economy, Centre for Agrarian Research and Education for South, vol. 4(2), pages 232-258, August.
    6. Fernández, Antonio Turrent & Wise, Timothy A. & Garvey, Elise, 2012. "Achieving Mexico’s Maize Potential," Working Papers 179101, Tufts University, Global Development and Environment Institute.
    7. Corral, Serafín & Legna-de la Nuez, David & Romero-Manrique de Lara, David, 2015. "Integrated assessment of biofuel production in arid lands: Jatropha cultivation on the island of Fuerteventura," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 41-53.
    8. Jennifer Clapp & Sophia Murphy, 2013. "The G20 and Food Security: a Mismatch in Global Governance?," Global Policy, London School of Economics and Political Science, vol. 4(2), pages 129-138, May.
    9. Antonio Turrent Fernández & Timothy A. Wise & Elise Garvey, 2012. "Achieving Mexico’s Maize Potential," GDAE Working Papers 12-03, GDAE, Tufts University.

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