Q16 - Agricultural R&D; Agricultural Technology; Biofuels; Agricultural Extension ServicesReturn

The article investigates the connections between the prices of biofuels and many traded commodities and other relevant assets in Europe, USA and Brazil. The analysis uses a comprehensive dataset covering price data for 32 relevant traded titles over the period 2003-2015. Main contribution of this article is a combination of minimum spanning tree and hierarchical tree approaches with expert economic understanding of biofuels market leading to identification of price connections in a complex trading system. Our analysis of mutual price connections discovers the major defining features of world leading biofuels markest over the last decade. We provide characteristics of main bioethanol and biodiesel markets with respect to technical and local features of the production and consumption of particular biofuels.

The interconnections within food, biofuel and fossil fuel markets are first described in the context of biofuels technologies and economic policy framework. Consequently, the econometric analysis consisting of Johansen cointegration, error correction model, vector autoregression and Granger causality is applied to price series of 12 biofuel related commodities. While a number of equilibrium relationships are found across the examined markets suggesting their interconnection, we do not obtain a persuasive confirmation of the thesis that biofuels clearly lead to food shortages via the increase in prices of basic food commodities used in the production of biofuels.

The average level of debts of agricultural enterprises in the CR is several times higher than in countries with established market economy. The main source is so-called transformation debts connected with the transformation of ownership and enterprise structure in the Czech agriculture after 1989. This specific form of farm indebtedness is a great debt burden with very different impacts on the particular categories of agricultural enterprises. A specific debt structure is characteristic of cooperative farms. The existence of many of them is directly endangered by bankruptcies in connection with unsettled payable liabilities from the ownership transformation towards entitled persons-non-members. Higher subsidies after the CR accession to the EU may con- siderably improve the financial situation of Czech agricultural enterprises, but the debt burden from transformation will remain a great handicap for a longer time and it will constrain the increase in competitiveness of many of these enterprises.