The Economic Impact of Biofuel Policy on the Agricultural Sector in the Great Plains Region, 1997-2017

Abstract Global biofuel production has increased over tenfold since 2000 and numerous biofuel production plants have been built in the Great Plains region. We estimate the impact of biofuel plants on the agricultural economy with county-level data on the number of farm operators, net farm income, and agricultural land values during 1997 to 2017 for 798 counties in twelve Great Plains states. We find that biofuel production facilities have a small negative association with the number of farm operators, but positive associations with net farm income and farmland values in the county where the biofuel plant is located and neighboring (adjacent) counties. Sustained positive associations of biofuel production with farm income and land values are likely to depend on the continuation of national and state government programs of ethanol blend mandates and tax credits. Diminished government bioenergy support could lead to declining farm income and land values in areas near plants.