Undergraduate Research in Agricultural Economics


Date of this Version

June 2008


The government has played a major role in supporting the progress of the ethanol industry. This paper examines what influence state governments have had and presently have in the development, production, and expansion of ethanol manufacturing. A vast array of subsidies, mandates, and other government supports are utilized in planning, constructing, producing, and expanding ethanol facilities as well as promoting and influencing greater ethanol consumption. Three general areas are considered in this paper: outlinked support, factors of production subsidies, and intermediate goods subsidies. This paper examines state subsidies specifically found within a twelve-state area, known as the North Central Region of the United States. The states that are included are: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. This collection of ethanol incentives will provide insight into the impact and extent of governmental support of grain ethanol at the state level in the North Central Region.