Abstract
AbstractAs history shows, the yield gap (the difference between actual and achievable yields) will not necessarily close automatically. Investments in agricultural technologies may be key. Price volatility is fundamental to investment. Price volatility has increased in agriculture in the past decade, leading to higher risks for potential investments. Some of these increased risks may be offset by the certainty offered by credible policies. The US experience indicates that ethanol policy may contribute to yield increases. Analysis suggests that corn use by ethanol plants in the USA may explain a significant part of the observed yield increase. A theoretical framework, centered on downside price‐stabilization effects, is offered here, supported by some US, EU, and Hungarian empirical evidence. The research presented explores whether new ethanol plants resulting from effective biofuel policies could serve as a market mechanism to stimulate investments in farming technologies, triggering increased productivity. A survey of local stakeholders of an ethanol plant in Hungary, the only large‐scale biofuel investment triggered in Europe by the EU's flagship bioenergy policy (the Renewable Energy Directive) suggests that relevant investments may have been stimulated. Over half of the respondent farmers said that the presence of the ethanol plant had stimulated investments in productivity. It is proposed that ethanol or biofuel policies may be effective in closing the yield gap, in effect resulting in additional biomass production and advancing the bioeconomy. With effective cross‐sectoral policies, more biomass for food, feed, bio‐based materials and / or bioenergy purposes can be produced. © 2019 The Authors. Biofuels, Bioproducts and Biorefining published by Society of Chemical Industry and John Wiley & Sons, Ltd.
Highlights
In many parts of the world the potential for crop yield increases, double cropping, and utilization of abandoned or underutilized land is large and mostly unexplored – see, e.g., Global Yield Gap Atlas.[1]
In addition to increased food security, higher productivity is relevant for the context of indirect land use change (ILUC) impacts, and one of the primary responses
The question necessarily arises of how and when do policies – ethanol and biofuel policies – impact crop yields? This paper aims to examine the factors that drive investment decisions in technologies that can influence yields
Summary
In many parts of the world the potential for crop yield increases, double cropping, and utilization of abandoned or underutilized land is large and mostly unexplored – see, e.g., Global Yield Gap Atlas.[1]. Since the biofuel market has provided a significant demand for corn – more than a third of corn produced is processed by biorefineries in the USA (ethanol, DDGS and other products) in recent years – it is reasonable to assume that there may have been an impact on yields.
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