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Abstract

The impact of increased consumption of biofuels on agricultural markets has already been substantial, and will increase further as countries around the world seek to expand the proportion of their energy that they get from renewable sources. Models of the agricultural sector must therefore include some consideration of the demand for agricultural products for biofuels and the byproducts that are produced as part of the production process that are returned to the agricultural sector. In this paper the method of introducing biofuels into the FAPRI GOLD (grains, oilseeds, livestock and dairy) model is discussed. A scenario is run whereby the EU is assumed to introduce a binding 10% target by 2020 and the results are discussed in order to illustrate the workings of the model. The modelling effort is ongoing and planned work is discussed. The aim of the paper is to highlight major issues in building a model of this type.

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