Biofuels tick many boxes off policymaker wish lists: energy security, environmental quality, improved farm incomes. But as ethanol has shown, they can also have unintended consequences on domestic and international economies by increasing demand – and prices – of former food crops such as corn.
A $499,998 grant from the U.S. Department of Agriculture’s National Institute of Food and Agriculture – one of two awarded to Cornell as part of a $12 million program – will allow researchers to delve deeper into the intricate interactions between crops and biofuel policies at home and abroad, and their implications for the international competitiveness of U.S. agriculture.
“Understanding the new era of crop prices and biofuels policies is important not only for price forecasting and market analysis, but also for environmental and social welfare issues,” said Harry de Gorter, a professor at the Charles H. Dyson School of Applied Economics and Management.
Biofuel policies have created a link between crops and biofuel prices that has affected the level and volatility of food grain and oilseed prices, but there is a critical gap in understanding about how these prices are determined, he said.
“This not only has implications for food security in developing countries, but also has adversely affected U.S. value-added agriculture, namely the livestock, dairy and poultry sectors,” de Gorter said.
He will evaluate the implications of evolving domestic and international biofuel policies on food grain and oilseed markets and value-added agriculture, and their effectiveness in meeting energy, environmental and agricultural policy goals. One of the challenges will be developing statistical methods to isolate the effects of biofuel policies from other determinants of food grain and oilseed prices; de Gorter will incorporate data on biodiesel and the growing Brazil sugarcane-ethanol export market into the corn-ethanol model to create an integrated model of energy, agricultural production and consumption.
“We will also examine the relationships between corn, wheat, rice, soybean and sugar prices to see if there has been a structural shift in this new biofuels era,” de Gorter said.
“I then hope to evaluate the effects of alternative policies at home and abroad under different future crude oil price scenarios to advise how the stated goals of the current policy mix can be met, but at a lower cost to society,” he added.
Mildred Warner, professor in the Department of City and Regional Planning, will partner with colleagues in the Community and Regional Development Institute (CaRDI); Binghamton University assistant professor George Homsy, MRP ’04, Ph.D ’13; the International City/County Management Association (ICMA); and the American Planning Association to explore how rural communities balance economic development and environmental protection as part of a $495,168 USDA grant.
“Climate change is a contentious area of public policy that pits the drive for economic development against the global imperative of environmental protection. Thrust into the middle are rural governments which struggle, often on their own, to protect both local jobs and the environment – a challenge made worse since the recession,” Warner said.
Absent national leadership on climate change, local governments have recognized many ways they can promote sustainability – through building codes, zoning rules, government purchasing, and service provisions such as transit and home weatherization, Warner said. Her preliminary research – presented in a briefing paper from the ICMA Center for Sustainable Communities – identified rural municipalities that are unlikely pioneers in their responses to climate change.
“The majority of Americans live in smaller communities under 25,000 [in] population. The national surveys conducted under this project will explore the factors that lead these communities to act and the constraints they face, and provide guidance for local, state, regional and national policy,” she added.
Stacey Shackford is a staff writer for the College of Agriculture and Life Sciences.