Market distortions and the benefits from research into new uses for agricultural commodities: Ethanol from corn

Interest of producer groups and government bodies has shifted to developing new industrial (nonfeed and nonfood) uses for agricultural commodities as a way of stimulating demand for those commodities. Possible benefits include reduced government program costs. This paper develops theoretical arguments and a simulation model to evaluate the size and distribution of benefits from different types of technical change in the production of ethanol from corn, with and without government ethanol programs and farm programs.