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Biofuels and economic development in Tanzania

  • Arndt, Channing
  • Pauw, Karl
  • Thurlow, James

Biofuels provide a new opportunity to enhance economic development in Tanzania. Drawing on detailed cost estimates, we develop a dynamic computable general equilibrium model to estimate the impact of different biofuel production scenarios on growth and poverty. Our results indicate that maximizing the poverty-reducing effects of a biofuels industry in Tanzania requires engaging and improving the productivity of smallholder farmers. Evidence shows that cassava-based ethanol production is more profitable than other feedstock options. Our findings also indicate that cassava generates higher levels of pro-poor growth than do sugarcane-based systems. However, if smallholder yields can be improved rather than expanding cultivated land, then sugarcane and cassava outgrower schemes can produce similar pro-poor outcomes. We conclude that in so far as the public investments needed to establish a biofuels industry in Tanzania are in accordance with national development plans, producing biofuels will contribute to achieving the country�s overall development objectives.

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Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 966.

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Date of creation: 2010
Date of revision:
Handle: RePEc:fpr:ifprid:966
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  1. Arndt, Channing & Benfica, Rui M.S. & Tarp, Finn & Thurlow, James & Uaiene, Rafael N., 2008. "Biofuels, Poverty, and Growth: A Computable General Equilibrium Analysis of Mozambique," 2009 Conference, August 16-22, 2009, Beijing, China 52004, International Association of Agricultural Economists.
  2. Searchinger, Timothy & Heimlich, Ralph & Houghton, R. A. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Tokgoz, Simla & Hayes, Dermot J. & Yu, Hun-Hsiang, 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change," Staff General Research Papers 12881, Iowa State University, Department of Economics.
  3. Headey, Derek & Fan, Shenggen, 2008. "Anatomy of a crisis: The causes and consequences of surging food prices," IFPRI discussion papers 831, International Food Policy Research Institute (IFPRI).
  4. Coyle, William T., 2007. "The Future of Biofuels: A Global Perspective," Amber Waves, United States Department of Agriculture, Economic Research Service, November.
  5. Diao, Xinshen & Hazell, Peter & Resnick, Danielle & Thurlow, James, 2006. "The role of agriculture in development: implications for Sub-Saharan Africa," DSGD discussion papers 29, International Food Policy Research Institute (IFPRI).
  6. Kretschmer, Bettina & Peterson, Sonja, 2010. "Integrating bioenergy into computable general equilibrium models -- A survey," Energy Economics, Elsevier, vol. 32(3), pages 673-686, May.
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