Impact of United States Corn-based Ethanol Production on Land Use

Abstract

This study examined the impact of corn-based ethanol production in the United States on land use in other countries (Indirect Land Use). Indirect land use is a change from non-cropland to cropland (e.g. deforestation) that may occur in response to increasing scarcity of cropland. As farmers worldwide respond to higher crop prices in order to maintain the global food supply and demand balance, pristine lands are cleared and converted to new cropland to replace the crops for feed and food that were diverted elsewhere to biofuel production. The results show that increasing ethanol production in the US has a positive and significant relation to the U.S corn price. The U.S. corn price does not have a significant impact on changes in corn acreage in Brazil and other countries such as Canada, Japan and China. Results suggest a minimal change in acreage in contrast to what is written in most research work, that ethanol production in the US will bring about an increase in corn prices which will result in change in land use in other countries. This is important as ethanol as a fuel is often criticized as having a net adverse impact on the environment because of indirect land use. Our study was unable to prove the existence of indirect land use.