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The economic viability of biomass crops versus conventional agricultural systems and its potential impact on farm incomes in Ireland

Daragh Clancy, James P. Breen, Anne Marie Butler and Fiona S. Thorne

No 6485, 107th Seminar, January 30-February 1, 2008, Sevilla, Spain from European Association of Agricultural Economists

Abstract: Ireland is currently importing 90 percent of its energy. The burning of domestically produced nonrenewable peat provides 4.9 percent of Ireland’s total primary energy supply while renewable biomass crops currently account for only 1 percent of the domestically produced energy supply. The Irish government have set a target of 30% of peat (approximately 0.9 million tonnes) used for electricity generation to be replaced by renewable energy crops. This would be equivalent to approximately 0.6 million tonnes of biomass crops or approximately 45,000 hectares of biomass. Direct payments and subsidies accounted for over 100 percent of average family farm income on beef and sheep farms in 2006. Therefore there appears to be significant potential for Irish farmers to replace conventional agricultural enterprises with biomass crops. A probit model was built to identify the socio-economic characteristics of farmers who may be willing to adopt energy crop production. The results from this were used in the construction of a linear programming model to determine the optimal enterprise for each farmer at varying energy prices.

Keywords: Agricultural Finance; Institutional and Behavioral Economics; Resource /Energy Economics and Policy (search for similar items in EconPapers)
Pages: 14
Date: 2008
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DOI: 10.22004/ag.econ.6485

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