Farmers and their groves: Will cost inefficiency lead to land use change?

- Farms owning forests are more cost inefficient than farms without them.
- Opportunity to support farm land reforestation while offseting income loss.
- Land transfer of FADN panel farms would add 45,000 ha of forests.
- New private forests bind CO2 and supply renewable feedstock for energy generation.
- Land transfer does not threaten food and feed supply.

Increased forest areas and climate change mitigation are policy goals enhanced by expanding private forest ownership. This study shows transfer of land from farms owning forested acreage associated with low quality land and high production costs achieves such goals. Calculated cost efficiency scores show a large gap between the most and least efficient farms, and farms with forests are less cost efficient. Land reforestation through subsidy programs could replace income from agricultural production. We illustrate that farms from the applied FADN panel could reforest 45,000 hectares, binding about 0.5 mln tons of carbon annually without limiting food or feed supply.