Impact assessment of global and national biofuels developments on agriculture in Pakistan

This research uses GTAP model to assess the expected future effects of national and global biofuels policies on agriculture markets and food prices in Pakistan. Our results show that by 2020, global mandates on biofuels will significantly affect the prices, production and trade of major feedstock crops such as sugarcane, maize, soybean and rapeseed, especially in the USA, Brazil and EU. Global biofuels developments are projected to increase the prices of maize, rapeseed, soybean, and sugarcane in Pakistan. Pakistan will benefit from improved trade balance in agriculture under the global-only scenario. Under Pakistan plus three-producer’s biofuels scenario, the price and production of sugarcane in Pakistan will increase substantially. Under this scenario, the country will face considerable loss in agricultural trade. Consequently, food-security of net-buyers may be threatened. The income of feedstock farmers will increase. Higher crude oil prices will strongly influence commodity markets via increased production of biofuels and agricultural production costs.