@article{Drabik:126615,
      recid = {126615},
      author = {Drabik, Dusan},
      title = {The Theory of Biofuel Policy and Food Grain Prices},
      address = {2011},
      number = {642-2016-43994},
      series = {WP},
      pages = {55},
      year = {2011},
      abstract = {We develop an analytical framework to assess the market  effects of alternative biofuel policies
(including  subsidies to feedstocks). U.S. corn-ethanol policies are  used as an example to study
the effects on corn prices. We  determine the ‘no policy’ ethanol price; analyze the  implications
for the ‘no policy’ corn price and resulting  ‘water’ in the ethanol price premium due to policy;
and  generalize the unique interaction effects between mandates  and tax credits to include ethanol
and corn production  subsidies. The effect of an ethanol price premium depends  on the value of
the ethanol by-product, the value of  production subsidies, and where the world ethanol price  is
determined. U.S. corn-ethanol policies are a major  reason for the increases in corn prices – an
estimated  increase of 26 – 45% in the period 2008 – 2011.},
      url = {http://ageconsearch.umn.edu/record/126615},
      doi = {https://doi.org/10.22004/ag.econ.126615},
}