Does palm oil mill increase the production of edible oil and biomass energy?
The rise in biomass energy market potential (left ( {alpha }_ {E}right)) prompt the farmer to increase the production quantity of fresh fruit, as indicated in Propositions 2 (a) and 2 (d). Consequently, the palm oil mill increases the production of edible oil and biomass energy.
How can a palm oil mill be profitable?
When the areas can be electrified, their economic value will rise. The palm oil mill is also induced to cooperate with farmers. With an appropriate agreement on the profit portion (left (lambda right)), the palm oil mill can be profitable with higher production of fresh fruit bunches, edible oils, and biomass energies.
Do palm oil mills face market heterogeneity?
Palm oil mills face market heterogeneity in both the edible oil and energy sectors as they seek to extract biomass from palm trees. Previous discussions on demand substitution focused solely on a homogeneous market, specifically the energy market.
How is corn based ethanol produced in Argentina?
Corn-based ethanol produced in Argentina is divided into two main stages: (i) farming and (ii) ethanol production. The production of both soybean oil (Argentinian and Brazilian scenarios) and palm oil (Colombian scenario) are organized into four central systems: (i) farming, (ii) oil extraction, (iii) oil refining, and (iv) oil transesterification.
What does a palm oil mill do?
The palm oil mills, in turn, process the commodity into edible oil and biomass energy. Palm oil mills also determine the sales margin from the selling price, with the remaining selling price after the margin serving as the wholesale price for palm oil farmers.
How does the palm oil mill anticipate the farmer’s actions?
The palm oil mill may also anticipate the farmer’s actions. Initially, the palm oil mill declares its sales margin from edible oil selling. The farmer then decides the quantity of fresh fruit bunches given the sales margin of the palm oil mill. The game is solved backwardly to illustrate sequential rationality.