Table of Contents
Economics Research International
Volume 2016, Article ID 6842837, 9 pages
http://dx.doi.org/10.1155/2016/6842837
Research Article

Economic Assessment of Producing Corn and Cellulosic Ethanol Mandate on Agricultural Producers and Consumers in the United States

1Department of Ag Economics and Agribusiness, Louisiana State University Agricultural Center, Red River Research Station, 262 Research Station Drive, Bossier City, LA 71112, USA
2Texas A&M AgriLife, Office of Federal Relations, Suite 150, 1500 Research Parkway, College Station, TX 77843-2259, USA
3College of Agriculture, Auburn University, Auburn, AL 36849-5406, USA
4Department of Agricultural Economics, 600 Kimbrough Boulevard, Suite 211B, TAMU 2124, College Station, TX 77843-2124, USA

Received 20 November 2015; Accepted 7 February 2016

Academic Editor: Jean Paul Chavas

Copyright © 2016 Naveen C. Adusumilli et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Strong support for the biofuels program in the USA is expected to influence dedicated biomass crops production. Their production is expected to compete for resources with traditional crops and in turn influence commodity prices, economic surplus, and trade balance. Implications of dedicated biomass crop as bioenergy feedstock, alternative energy policies, and government initiatives on agricultural producers and consumers are evaluated using a national quantitative model, AGSIM. Economic impacts include effect on cropping patterns, crop prices, fertilizer prices, consumer and producer surplus, and trade balance. Economic analyses based on alternative assumptions related to marginal lands currently in conservation use returning to crop production as well as biomass crop yields are conducted. Results indicate that present biofuel policies are associated with large costs to consumers in terms of increased commodity prices and negative trade balance. Increase in net farm income is offset by decrease in consumer surplus. The results represent a robust set of economic impacts, which suggests policy makers to consider the unexpected economic consequences of bioenergy policy and warrants consideration of multiple alternative energy sources to achieve a sustainable energy goal.