Assessing the food vs. fuel issue: An agent-based simulation. (December 2021)

• Record Type: Journal Article
• Authors: Brown, Bijon; Schoney, Richard; Nolan, James
• Is Part Of: Energy policy. Volume 159(2021)
• Publication Date: 2021-12
• Subjects: Agriculture -- Biofuel -- Simulation; Energy policy -- Periodicals; Politique énergétique -- Périodiques; Electronic journals; 333.79
• DOI: 10.1016/j.enpol.2021.112553
• Languages: English
• ISSNs: 0301-4215

Abstract

Abstract: Energy security and environmental concerns are critical issues for North America. The development of the bio-fuel industry has given grain farmers another crop option. Trends towards renewable fuels could also put fuel production at odds with traditional food agriculture, a situation referred to as the "food vs. fuel" debate. This research models profit maximizing farm crop choices as energy crops become a crop option. We develop a simulation to estimate the oil price level where farmers would switch from the production of grain for food over to bio-energy crops. We also investigate consequences associated with this process on the elevator industry. Using a major crop production region in Canada as a template, we estimate that real annual crude oil prices must remain consistently 30% above the (2008) peak oil price before most farmers in the region would switch over to the production of wheat for biofuel. If government biofuel support falls from current levels, a considerably higher oil price would be needed to entice farmers to switch. As the production of food grain decreases, we also observe that the grain handling industry will gradually "shake out" and likely be characterized by much higher elevator firm concentration than exists currently. Highlights: Agent based agricultural simulation addressing the food vs. fuel debate associated with grain production. Detailed model of a major North American agricultural production region and associated supply chain. Find energy prices/subsidies need to be quite high (higher than actual peak oil prices) to induce farmers to switch over from food to fuel based production. Grain elevation in the region seems destined to become even more concentrated over time.