PRODUCTION OF BIOFUELS WITH CORN: A WELFARE ANALYSIS IN MEXICO

According to the decrease in the global offer and the increase of prices of fossil fuels exists a growing trend to generate energy alternatives. The production of commodities to generate biofuels competes with the production of foods, fibers and wood. The ethanol production from grains as corn and weath will impact the global market of food. In the United States, the main supplier of yellow corn to Mexico, in 2012 is foreseen to use a mixture of biofuels with ten percent of ethanol (OECD, 2006). The use of corn, basic food of Mexicans, in the generation of ethanol will have redistributive effects of social welfare through prices and amounts produced and consumed.