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Global and Regional Modeling of Biomass Markets

The interaction of long-term world market trends, and expanding biomass webs in the economies of the study countries

Problem statement: The long-term impact analysis of increased and more efficient food and non-food biomass production in Sub-Saharan Africa (SSA) will be dependent on the global trends in biomass demand. Demand from emerging economies, increasing global scarcity in suitable cropland, and rising energy prices all suggest that global biomass demand will continue to increase in the coming decades, providing new and lasting price incentives to African producers. In turn, strong growth in overall biomass demand will provide incentives to African farmers and crop processors to produce more non-food biomass commodities by reallocating productive resources or employing resources that before had been underutilized. Particularly in the latter case, increased biomass production could contribute to overall economic growth, the extent and composition of which, however, is uncertain.

Research questions:

  1. What are possible scenarios of global demand for food and non-food biomass?
  2. How will world price levels for biomass respond to these demand and supply trends?
  3. How will international price trends be transmitted to national markets in Africa, especially the case study region.
  4. Which global commodity market repercussions (regional supply and world market prices) can be expected from different scenarios of biomass expansion in Sub-Sahara Africa?
  5. How will growth in biomass production contribute to the growth of the entire economy?
  6. How could the emergence/implementation of defined technology packages related to biomass webs change the food balances of the case study regions?
  7. Where does food production compete with non-food, and which complementarities and synergies could be exploited?
  8. How will aggregate availability of and access to food by poor consumers be affected?
  9. Which macroeconomic effects can be expected from an agricultural expansion into biomass webs, particularly on aggregate demand, the balance of payments, and economic growth?

Methodology:

Simulations using the global agricultural market simulation model CAPRI (www.capri-model.org).  Simulation of scenarios of biomass expansion using coupled partial- and general equilibrium models.

Countries of field research:

•    Ghana
•    Ethiopia

Involved partners:

  • ILR, University of Bonn, Germany
  • ISSER, Accra, Ghana
  • IFPRI, Addis Ababa, Ethiopia

Investigators:

  • Dr. Arnim Kuhn
    Senior Researcher
    University of Bonn
    Institute for Food and Resource Economics (ILR)
    Email: arnim.kuhn@ilr.uni-bonn.de
  • Dr. Felix Asante
    Senior Researcher
    Institute of Statistical, Social and Economic Research (ISSER)
  • Prof. Dr. Thomas Heckelei
    Team Leader
    Institute for Food and Resource Economics (ILR)
  • Ermias Legesse Engida
    Junior Researcher
    Institute for Food and Resource Economics