Economic effects of the biochar application on rice supply in Taiwan

Abstract

Th e 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. Th e eff ects 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 (Modifi ed Taiwan Agricultural Sec tor 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 benefi ts 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. Th e results indicate that the biochar utilization can potentially increase social benefi ts if rice is planted. Th e net increase of farmer›s and the environmental revenues can achieve up to NT$ 419 400. Moreover, we fi nd that farmers should give priority to the improvement of nutrient saving to make higher benefi ts. Second, the total benefi ts could be improved if the seed use is effi cient and harvesting and transporting costs for the energy crop and processing and the hauling cost of biochar are lower. Simulation results indicate that Taiwan benefi ts from the bio-energy production in terms of energy security, farmers revenue, social welfare and rice supply. Th e 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 signifi cantly.