Open AccessFarm level and budgetary calculations on production of turnip rapeseed oil-methyl-ester (RME) for fuel of diesel engines
Author(s) -
John Sumelius
Publication year - 1991
Publication title -
agricultural and food science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.347
H-Index - 35
eISSN - 1795-1895
pISSN - 1459-6067
DOI - 10.23986/afsci.72414
Subject(s) - rapeseed , diesel fuel , production (economics) , environmental science , economics , motor fuel , agricultural science , agricultural economics , pulp and paper industry , waste management , gasoline , chemistry , microeconomics , engineering , food science
This paper calculates the production costs of turnip rapeseed oil-methyl-ester (RME) as a substitute for diesel fuel. Theoretical farm models, which assume that compulsory fallowing area might be used for cultivating turnip rapeseed, provide the estimated short term production costs. The necessary government support for producing RME is calculated based on the difference between the production costs of RME against the taxfree wholesale price for diesel oil. In 1990 prices, a producer price of 1.70FIM/kg for turnip rapeseed means production costs of RME are approximately 4.28 FIM/1, or five and a half times higher than the taxfree wholesale price of diesel oil. When the realized producer price in 1990 of 4.12 FIM/kg is used, the RME production costs are 9.98 FIM/1. Thus, there is no economic basis for RME production in Finland.