Are participators in the land retirement program likely to grow energy crops?

Due to the increasing demand for energy, interaction between land use and energy-related crop production has recently become a subject of great attention. Although a considerable body of literature has examined the extent to which the increased demand for biofuel may impact agricultural land use, little evidence has been provided as result of farmer level surveys. Using a unique and national representative survey of all eligible farmers in the land retirement program in Taiwan in 2005, this study examines the interaction between the land retirement program and energy crop production. Results points to a positive association between the enrolled land area and the likelihood of energy crop production. However, the magnitude of the effects is not substantial. This may reflect the fact that the current subsidy to farmers to grow energy crops on their fallow land is not high enough to provide strong incentive.

► This study examines the interaction between the land retirement program and energy crop production.
► A unique and national representative survey of all eligible farmers in the land retirement program in Taiwan in 2005 is used.
► A positive but minor effect of the enrolled land area on energy crop production is found. This may be because the current subsidy to grow energy crops does not provide enough incentives to farmers.