Ethanol and Corn Prices: The Role of US Tax Credits, Mandates, and Imports

  • Harry de Gorter
  • David R. Just
Part of the Studies in Productivity and Efficiency book series (SIPE, volume 7)


The recent global increases in agricultural commodity prices can be attributed to a number of factors, but one of the most important was the large increase in US ethanol production. We argue that without a complex web of ethanol policies, little ethanol would be produced in the United States. This is likely the case for biofuel production in the EU, Canada, and other developed countries as well. It is increasingly evident that developing countries have a comparative advantage in the production of biofuels and their feedstock. Yet policies have been enacted that discriminate against trade. The result is little international trade in biofuels. This chapter puts into perspective the effects of US ethanol policies on commodity prices, as well as their impact on US terms of trade.


Ethanol Production Gasoline Price Import Tariff Production Subsidy Gasoline Consumption 
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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.Department of Applied Economics and ManagementCornell UniversityIthacaUSA

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