Changes in land use and biomass availability resulting from rising mineral oil prices, food prices or increased agro-energy production

The profitability and development of the agro-energy sector are strongly influenced by changes in the oil price, food prices and agro-energy support schemes. Therefore, these factors have to be taken into account when assessing the competitiveness of energy crop production or when estimating the prospective availability of biomass for the agro-energy sector. This study examines changes in the use of land and resources for several regions in Germany and the effect on energy crop production caused by the resulting drastic increase in oil prices, food prices, and the expansion of agro-energy production. Optimization models are used that simulate land use as a result of decision-making at farm and regional level. The methodological procedure includes a) the definition of the simulation scenarios, b) simulation of future resources by means of multi-criteria optimization applying linear programming models for regionalized farms, c) analyzing the effect that changing the underlying conditions has on energy crop production and the resulting availability of resources for energy production, and d) assessment of the economic impacts of increasing oil prices, food prices and agro-energy production. The results indicate that an increase in oil prices improves the competitiveness of food production in respect of the production of energy crops. Simultaneously, rising oil prices weaken the effect of support schemes for agro-energy production, as food production and energy crop production compete for scarce resources. The results confirm that agro-energy support schemes are the main stimulus for the development of the agricultural energy sector. The changes in resource use and the resulting biomass availability for agro-energy production vary significantly, as they are subject to regional and farm operation characteristics and resources endowment. In accordance with this, chances and risks for the agricultural energy sector differ strongly from one region to another. Future research into the possibilities and risks of agro-energy production should therefore always take the regional distinctions into account.