The Economics of Ethanol, Agriculture and Food

Abstract

The global expansion of the production and consumption of bio-fuels has had a pronounced and widespread impact on related factor and product markets. This is most notable in the case of ethanol. The use of corn to produce bio-fuel for blending with gasoline in many countries has contributed to the recent increases in the price of corn and food. The diversion of corn from food and animal feed to fuel, and the conversion of crop land to produce corn-for-fuel, has led to supply and price pressure on other cereal and feed crops. This has led to diminished and more costly supplies of food for global food aid programs.