Agricultural disaster programs and family farm labor supply in Taiwan

Purpose - The purpose of this paper is to investigate the effects of disaster relief payments on on-farm and off-farm labor supply of farm households in Taiwan. The effectiveness of the policy amendments of the disaster relief assistance programs is also examined. Design/methodology/approach - A unique sample of 124,827 persons living in the family farm household in 2009, 2011, 2012, 2013 and 2014 was used. This sample was merged into the township-level administrative profile of all of the recipients of agricultural disaster relief payments from the Natural Disaster Program in Taiwan. A fixed effect panel data model was estimated to analyze the impacts of disaster relief payments on each individual’s labor supply decision. Findings - Natural disaster payments significantly reduced individual’s propensity to work on the farm. Moreover, the higher of the payments, the higher(lower) possibility of the individual to engage in on-farm(off-farm) work. In addition, an increase in the amount of disaster payments can increase the on-farm labor supply of family farm members. Research limitations/implications - Due to data unavailability, an individual-level panel data set is not used. Future studies can check the robustness of the finding using an individual-level panel data set. Originality/value - This paper contributes to the limited empirical evidence on agricultural relief programs.