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Market Interactions, Farmer Choices, and the Sustainability of Growing Advanced Biofuels

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  • Jiang, Yong
  • Swinton, Scott M.

Abstract

Advanced biofuels such as cellulosic ethanol are of great interest for their potential to supply a significant portion of U.S. fuel needs plus advantages over corn grain-based ethanol. The sustainability of agriculture-based advanced biofuels depends on how farmers would respond in providing biomass feedstock, yet economic behavior by farmers has been under recognized by the science community. Focusing on markets and policy incentives, this research shows that farmers are unlikely to convert current grain cropland to grow a dedicated cellulosic biomass crop such as switchgrass. However, the financial incentives to harvest cellulosic biomass provided by the 2008 farm bill may stimulate corn production due to demand for corn grain for feed and ethanol and corn residues for advanced biofuels. The prospect of continuous, possibly expanding corn production for advanced biofuels raises the same environmental issues as for corn grain-based ethanol. To assure the environmental sustainability of advanced biofuels production, environmental policies are needed to complement existing bioenergy initiatives.

Suggested Citation

  • Jiang, Yong & Swinton, Scott M., 2008. "Market Interactions, Farmer Choices, and the Sustainability of Growing Advanced Biofuels," Staff Paper Series 43634, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    • Handle: RePEc:ags:midasp:43634
    DOI: 10.22004/ag.econ.43634
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    References listed on IDEAS

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    1. Duffy, Michael & Nanhou, Virginie, 2002. "Costs of Producing Switchgrass for Biomass in Southern Iowa," Staff General Research Papers Archive 10346, Iowa State University, Department of Economics.
    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 Archive 12881, Iowa State University, Department of Economics.
    3. Hallam, Arne & Anderson, I. C. & Buxton, D. R., 2001. "Comparative Economic Analysis of Perennial, Annual and Intercrops for Biomass Production," Staff General Research Papers Archive 5076, Iowa State University, Department of Economics.
    4. Hipple, Pat & Duffy, Michael, 2002. "Farmer's Motivation for Adoption of Switchgrass," Staff General Research Papers Archive 10347, Iowa State University, Department of Economics.
    5. Jensen, Kimberly L. & Clark, Christopher D. & Ellis, Pamela & English, Burton C. & Menard, R. Jamey & Walsh, Marie E., 2006. "Farmer Willingness to Grow Switchgrass for Energy Production," 2006 Annual meeting, July 23-26, Long Beach, CA 21355, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Duffy, Michael, 2007. "Estimated Costs for Production, Storage, and Transportation of Switchgrass," Staff General Research Papers Archive 12917, Iowa State University, Department of Economics.
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