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The Impact of Rising Ethanol Production on the Brazilian Market for Basic Food Commodities: An Econometric Assessment

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  • Anelise Rahmeier Seyffarth

    (University of Oldenburg)

Abstract

The controversial debate on the impacts of rising biofuel production on food commodity markets is of great policy relevance in Brazil. This paper contributes to the discussion by applying panel data regression models with fixed effects using OLS. Our dataset comprises annual production/harvested area data for sugar, ethanol and five other staple commodities ranging from 1981 to 2009 for 24 Brazilian states. Our results indicate that rising ethanol production exerts statistically significant positive impacts on sugarcane; negative impacts on rice, beans and soybeans acreage but no statistically significant effect on the areas for corn and manioc. The negative impacts on commodities’ acreage have implications for the associated prices. Ceteris paribus, rising ethanol production puts some upward pressure on the prices for rice, beans and soybeans. However, the economic implication of these direct land use effects is attenuated due to the moderate scale of any effect.

Suggested Citation

  • Anelise Rahmeier Seyffarth, 2016. "The Impact of Rising Ethanol Production on the Brazilian Market for Basic Food Commodities: An Econometric Assessment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(3), pages 511-536, July.
    • Handle: RePEc:kap:enreec:v:64:y:2016:i:3:d:10.1007_s10640-015-9881-5
    DOI: 10.1007/s10640-015-9881-5
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    More about this item

    Keywords

    Agricultural land; Biofuels; Fixed effects models; Panel data; Staple commodities;
    All these keywords.

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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