Effects of biogas production on inter- and in-farm competition Report as inadecuate

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Biogas production is one of the influential innovations of recent decades in Germanagriculture. Due to high guaranteed energy prices biogas production led to distortions in agricultural and land markets. This paper provides insights in effects of biogas production on farms, farm structures and rural areas for the region Altmark, Germany, for the period 2012-2026 by using the agent-based simulation model AgriPoliS. AgriPoliS enables to simulate agriculturalstructural change and impacts of policies based on a linear programming approach. To maximize the household-income, farm agents can invest, produce and compete against each other on the land rental market. To analyse effects of biogas production, biogas plants, possible substrate mixtures and feed-in remunerations are introduced in the model. In our analyses, we focus on 1) the choiceof production of farms, 2) the competition between farms, and 3) impacts on rural areas including environmental issues and labour market. Our simulation results show that biogas production provides especially for farmers with high management capabilities and large farms a profitable income opportunity. On average, biogas farms cannot increase their profitability. As result of anincreased value added through biogas production and high competition among farms, rental prices increase and thus a high share of the value added is transferred to the land owners. Biogas production leads to an intensification of land use, especially to increases in cultivation of grass andmaize silage instead of meadows and other crops, and in livestock production. This may cause negative environmental effects. On the other hand both, the intensification and the biogas production have positive effects on the labour market as biogas farms have an additional workforce demand.

Keywords: biogas production ; agricultural production ; agent-based model AgriPoliS ; land rentalprices

Subject(s): Agribusiness

Agricultural and Food Policy

Issue Date: Sep 18 2012

Publication Type: Conference Paper/ Presentation

PURL Identifier: http://purl.umn.edu/135772

Total Pages: 20

Record appears in: European Association of Agricultural Economists (EAAE) > 131st Seminar, September 18-19, 2012, Prague, Czech Republic

Author: Ostermeyer, Arlette ; Schonau, Franziska

Source: http://ageconsearch.umn.edu/record/135772?ln=en

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