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Fuel Ethanol and Agriculture: An Economic Assessment

Author

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  • Gavett, Earle E.
  • Grinnell, Gerald E.
  • Smith, Nancy L.

Abstract

Increased fuel ethanol production from renewable resources like grain through 1995 would raise net farm income benefiting mainly corn and livestock producers. Production of additional byproduct feeds would depress prices of soybeans. Large ethanol subsidies, which are required to sustain the industry, would offset any savings in agricultural commodity programs. Increased ethanol production would also raise consumer expenditures for food. Any benefits of higher income to farmers would be more than offset by increased Government costs and consumer food expenditures. Direct cash payments to corn growers would be more economical than attempting to boost farm income through ethanol subsidies.

Suggested Citation

  • Gavett, Earle E. & Grinnell, Gerald E. & Smith, Nancy L., 1986. "Fuel Ethanol and Agriculture: An Economic Assessment," Agricultural Economic Reports 308014, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerser:308014
    DOI: 10.22004/ag.econ.308014
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    File URL: https://ageconsearch.umn.edu/record/308014/files/aer562.pdf
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    References listed on IDEAS

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    1. Larry Salathe & J. Michael Price & David E. Banker, 1984. "An Analysis of the Farmer-Owned Reserve Program, 1977–82," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(1), pages 1-11.
    2. U. S. Department of Agriculture & U. S. Department of Energy, 1983. "A Biomass Energy Production and Use Plan for the United States, 1983-90," Agricultural Economic Reports 307952, United States Department of Agriculture, Economic Research Service.
    3. Salathe, Larry E. & Price, J. Michael & Gadson, Kenneth E., 1982. "The Food and Agricultural Policy Simulator: The Dairy-Sector Submodel," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 34(3), pages 1-14, July.
    4. Salathe, Larry E. & Price, J. Michael & Gadson, Kenneth E., 1982. "The Food and Agricultural Policy Simulator," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 34(2), pages 1-15, April.
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    Cited by:

    1. Hettinga, W.G. & Junginger, H.M. & Dekker, S.C. & Hoogwijk, M. & McAloon, A.J. & Hicks, K.B., 2009. "Understanding the reductions in US corn ethanol production costs: An experience curve approach," Energy Policy, Elsevier, vol. 37(1), pages 190-203, January.
    2. Fox, Glenn & Shwedel, Kenneth, 2007. "North American Ethanol Bionenergy Policies and Their NAFTA Implications," 2007 NAAMIC Workshop IV: Contemporary Drivers of Integration 163897, North American Agrifood Market Integration Consortium (NAAMIC).
    3. LeBlanc, Michael & Reilly, John, 1988. "Ethanol: Economic and Policy Tradeoffs," Agricultural Economic Reports 308040, United States Department of Agriculture, Economic Research Service.

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