Economic effects of the biochar application on rice supply in Taiwan

Meng-Shiuh Chang, Wen Wang and Chih-Chun Kung
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Meng-Shiuh Chang: School of Public Finance and Taxation, Southwestern University of Finance and Economics, Chengdu, China
Wen Wang: School of Public Finance and Taxation, Southwestern University of Finance and Economics, Chengdu, China
Chih-Chun Kung: Institute of Poyang Lake Eco-economics, Jiangxi University of Finance and Economics, Nanchang, China

Agricultural Economics, 2015, vol. 61, issue 6, 284-295

Abstract: The objective of the study is to analyze the economics of the bio-energy production for Taiwan in terms of the bio-energy production, social welfare and crop yield increase under the conventional bio-power, ethanol and pyrolysis. The effects on rice production patterns are also examined for the fast and slow pyrolysis plus the biochar application. In addition to adopting the mathematical programming model (Modified Taiwan Agricultural Sector Model) in the analysis of the bio-energy production and the crop cultivation patterns, the study further employs a nonparametric kernel regression model to forecast the increased benefits of rice from using biochar under various scenarios. With the biochar application, Taiwan's rice production could increase ranging from 6308 to 38 118 tons annually, depending on the pyrolysis type and the plant location. The results indicate that the biochar utilization can potentially increase social benefits if rice is planted. The net increase of farmer>s and the environmental revenues can achieve up to NT$ 419 400. Moreover, we find that farmers should give priority to the improvement of nutrient saving to make higher benefits. Second, the total benefits could be improved if the seed use is efficient and harvesting and transporting costs for the energy crop and processing and the hauling cost of biochar are lower. Simulation results indicate that Taiwan benefits from the bio-energy production in terms of energy security, farmers revenue, social welfare and rice supply. The results show that, in general, pyrolysis plus the biochar application not only increase the domestic renewable energy supply but also enhance the farmers' and environmental revenues significantly.

Keywords: bio-ethanol; energy security; food supply; nonparametric analysis; pyrolysis (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:61:y:2015:i:6:id:147-2014-agricecon

DOI: 10.17221/147/2014-AGRICECON

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