Food vs. fuel: The effect of biofuel policies

Xiaoguang Chen, Madhu Khanna

Research output: Contribution to journalArticle

Abstract

The rise in food commodity prices since 2004, which reached record highs in 2008, has coincided with the tripling of corn ethanol production from 15 billion liters (BL) to 50 BL over the 2004-2010 period. has surged as a result of government policies like the Renewable Fuel Standard (RFS), volumetric ethanol excise tax credit (VEETC) for blenders of ethanol, and tariffs that restrict the imports of sugarcane ethanol. Policies such as the VEETC if provided only to first generation biofuels could influence their competitiveness relative to cellulosic biofuels while the import tariff protects not only corn ethanol but also the cellulosic biofuel industry. The competitiveness of these three types of biofuels relative to each other could, however, change in the coming decade. Biofuel production in the US has largely been from corn and the US has overtaken Brazil as the largest producer in the world. Cellulosic biofuels are yet to be produced commercially due to their high costs of production.

Original languageEnglish (US)
Pages (from-to)289-295
Number of pages7
JournalAmerican Journal of Agricultural Economics
Volume95
Issue number2
DOIs
StatePublished - Jan 1 2013

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ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics

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