A Purdue University study found that the Renewable Fuel Standard played a critical role in the economic health of rural America.
The Purdue ag economist who led the study says this is the first comprehensive examination of market factors and policies affecting biofuels. The RFS played a critical role in reducing uncertainties in commodity markets, and its most significant impact was helping farmers use resources more efficiently. While producing more corn and soybeans as the years went by, U.S. farmers were able to bring fallow land that was previously unused back into production.
U.S. annual farm incomes increased by $8.3 billion between 2004 and 2011, with an additional annual income of $2.3 billion between 2011 and 2016. The Purdue study looked at both short- and long-term price impacts of policies and other market forces on the expansion of the biofuels industry and accurately measured the impact of each market driver.