Purdue researcher links RFS to biofuels and agriculture in first-of-its-kind study

In Indiana, capturing the interactions between biofuels and agricultural industries and their connections with other economic activities was key to a first-of-its-kind study.

“This is the first comprehensive examination of market factors and policies on the expansion of biofuels production in the U.S. to examine the economic impact of these individual drivers separately,” said Farzad Taheripour, the Purdue University agricultural economist who led the study. 

“We found that RFS played a critical role in reducing uncertainties in commodity markets, and its most significant impact was to help farmers use their resources more efficiently. By producing more corn and soybeans, over time the farmers were able to bring fallow land that had been unused back to production, and U.S. annual farm incomes increased by $8.3 billion between 2004 and 2011, with an extra additional annual income of $2.3 billion between 2011 and 2016.”

The economic study looked at both short- and long-term price impacts of policies and other market forces on the expansion of the biofuels industry and was able to identify the impact of each individual market driver. A paper detailing the team’s work is available in the journal Frontiers in Energy Research.