Land Use Impacts by Emerging Biofuels Markets

The bioenergysite website recently summarized a report by Iowa State University scientists (United States), "Land Allocation Effects of the Global Ethanol Surge: Predictions from the International FAPRI Model."  In the report, the impacts of emerging biofuel markets on American and global agriculture in the coming decade were analyzed using the "multi-market, multi-commodity international FAPRI (Food and Agricultural Policy Research Institute) model" (related information below). The following are the highlights of the summary report: (1) The United States (US) and Brazil are major ethanol producers/ exporters, but China, India and the EU (European Union) have growing bioethanol industries, (2) Increases in production and/or consumption of ethanol in the US, Brazil, China, India and the EU result in local land allocation effects which can "propagate globally through world trade and price effects", (3) price effects "induce land reallocation away from crops for which relative prices fall and towards crops for which relative prices rise", (4) changes caused by expanded US ethanol production will impact prices of corn, soybean, and sorghum and this has a knock-on effect on world prices; short term reduction in meat production is also seen, (5) the impact of global ethanol expansion is "limited to the sugar cane and sugar markets and because sugar cane competes for less land with other crops than corn, the land use change is not as significant as in the US scenario." The full report can be accessed from the Iowa State University website (URL above).

Related information on FAPRI models: http://www.fapri.iastate.edu/models/