Impacts of energy price increases on the well-being of farmers and consumers
The change which has most affected the agricultural sector has been the substitution of capital inputs for labor in the agricultural production process facilitated by availability of cheap fuel to run new machinery. Farmers are now experiencing large increases in the cost of energy. This econometric study examines the impacts of rising petroleum prices on the well-being of farmers and consumers. In general, as energy prices rise, farmers purchase less machinery, less fertilizer, and more labor, reversing previous trends in input usage. Because of these changes, crop yields decline and output is reduced. As total crop supply declines, prices received by farmers increase. The higher prices for these crops raise the cost of feeding livestock. Thus livestock production is reduced and the price for livestock rises. Since the demand for food goods is inelastic with respect to its own price, farm incomes actually rise. Consumers, on the other hand, face higher food prices and slightly reduce their consumption of meat products. 9 references, 9 figures, 4 tables.
- Research Organization:
- Soil Conservation Service National Technical Center, Fort Worth, TX
- OSTI ID:
- 6688314
- Journal Information:
- Energy Syst. Policy; (United States), Vol. 8:3
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
29 ENERGY PLANNING
POLICY AND ECONOMY
AGRICULTURE
ENERGY EXPENSES
ECONOMIC IMPACT
ECONOMETRICS
ECONOMIC ELASTICITY
FINANCIAL DATA
FOOD
PRODUCTIVITY
DATA
ECONOMICS
INDUSTRY
INFORMATION
320200* - Energy Conservation
Consumption
& Utilization- Transportation
290200 - Energy Planning & Policy- Economics & Sociology