The Demand for Gasoline and Diesel Fuel in Agricultural Use in Virginia

Abstract

A useful guide for the direction of future agricultural policy on energy requires, in part, detailed knowledge of the demand for different types of energy in different types of agriculture. Two approaches have been used in examining these demand relationships: (1) projecting total agricultural energy requirements, allocating these requirements among different agricultural subsectors, and estimating energy use in different agricultural enterprises; and (2) linear programming (LP) or constrained input-output (I/O) analyses to assess impacts of high energy prices and quantity restrictions on agricultural activities. However, these approaches usually require some stringent assumptions which limit the applicability of the results, and they provide little information about the economic factors that influence the demand for various types of energy. In short, the two approaches may be too restrictive to portray adequately the range of opportunity and response open to the agricultural sector. Emphasis needs to be given to those approaches which can provide information about the economic structure of energy use in the agricultural sector.