Modelling of state support for biodiesel production

Abstract

Government support for the development of biofuel production is a relevant part of the system of budget regulation of agricultural production in the Russian Federation. Currently, there is no sound financing method for mechanisms of state regulation of biofuel production which impedes impartial allocation of funds and makes this procedure non-transparent and not motivated enough. In view of this situation, a mathematical economic model was developed that allows one to calculate the optimum level of government support for every type of biofuel considering main areas of state support. We propose to consider three scenarios for the determination of the optimum level of public funding. The first one allows for optimization of the level of government support considering sizes of agricultural production for the i-th crop to provide farms of the region. The second scenario suggests the determination of the maximum profit from the biofuel production through increased agriculturally used areas. Finally, the third one considers calculation of the minimum expenses of achieving the volume of production that provides the farm with raw materials. According to the first scenario, the optimum level of government support for the field should be 1163.6 million rubles. In the implementation of the second scenario in the Samara region, the agriculturally used area planted with oil crops should be increased by 47.1 thousand ha.