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Economic Effects of Biofuel Production on States and Rural Communities

Published online by Cambridge University Press:  09 September 2016

Joe L. Parcell  and
Patrick Westhoff
Joe L. Parcell
Affiliation:
Department of Agricultural Economics, University of Missouri-Columbia
Patrick Westhoff
Affiliation:
Food and Agricultural Policy Research Institute, Department of Agricultural Economics, University of Missouri-Columbia
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Abstract

This study summarizes research on farm-, local-, regional-, and macro-level economic effects of ethanol production. Given current production levels, the ethanol production industry annually employees approximately 3,500 workers, pays out nearly $132 million in worker salaries, generates over $110 million in local taxes, and takes in some $2 billion in government incentive payments. Projections for a 60 million gallon per year ethanol plant indicate an annual increase in corn usage of 21 million bushels, a one-time capitalization of $75 million, an increase in local corn prices of between $0.06/bushel and $0.12/bushel, a 54 direct and a 210 indirect jobs created, an increase in local tax revenues of $1.2 million, a decrease in federal commodity program outlays of $30 million, and an increase in ethanol production incentives (federal only) of around $30.5 million.

Keywords

biofuelethanollocal economygovernment subsidiesO13Q40Q42R10
Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 38 , Issue 2 , August 2006 , pp. 377 - 387
Copyright
Copyright © Southern Agricultural Economics Association 2006

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