Impacts of the French bio-fuel policy on the French arable crop sub-sector

The paper provides an analysis of the impacts of the biofuel policy on the French arable crop sub-sector. The model used is a biofuel supply model composed of an agricultural module and an industrial biofuel processing module. The agricultural supply model is an aggregation of 1094 farm models, based on data from the French Farm Accountancy Data Network (FADN). Different biofuel chains are included in the model: ethanol from wheat and sugar beet, biodiesel (Vegetable Oil Methyl Ester) from rapeseed and sunflower. Scenarios are built upon the recent policy of an increased demand of biofuels for the next years, under the assumption of fulfilling the targets with domestic production only. Results show that the incorporation target of 7% of biofuels in transport fuels would have small impacts on the wheat and sugar beet cultivated areas but would lead to a considerable increase in the rapeseed area. In the main producing regions, the rapeseed area would reach approximatively a third of the total farmed area. This would not be without consequences on the environment, due to the increase in pesticide use that this change in cropping patterns would most certainly induce. It would not be possible to reach a 10% incorporation target without imports. Furthermore, we analyse the impacts of reaching these production levels on the rapeseed opportunity costs, and show that reaching high level of incorporation (above 7%) will need a very high increase in rapeseed prices paid to farmers. We calculate the impacts of this opportunity cost increase on the competitiveness of biofuels with respect to fossil oil, for different levels of oil prices. We test the sensitivity of the results against the wheat price, and show that this latter will have a significant impact on the biodiesel competitiveness.