IDEAS home Printed from
   My bibliography  Save this article

The adoption of switchgrass and miscanthus by farmers: Impact of liquidity constraints and risk preferences


  • Bocquého, G.
  • Jacquet, F.


Lignocellulosic biomass is expected to become a key feedstock for renewable energy production. However, the potential supply strongly depends on farmers' willingness to grow the new perennial energy crops. Many economic assessments have been led at the farm level, all based on the standard net present value approach. This paper looks into the effect of farmers' liquidity constraints and risk preferences on switchgrass and miscanthus adoption by farmers. We study the problem of the land allocation between a traditional cropping system and an innovative one in a static framework, using four intertemporal choice models. We find that, in central France agronomic and economic conditions, switchgrass and miscanthus result to be less profitable in terms of annualised net margin than the usual rape/wheat/barley rotation. Nevertheless, they can be highly competitive as diversification crops when appropriate contracts are offered to farmers, despite the additional liquidity they require.

Suggested Citation

  • Bocquého, G. & Jacquet, F., 2010. "The adoption of switchgrass and miscanthus by farmers: Impact of liquidity constraints and risk preferences," Energy Policy, Elsevier, vol. 38(5), pages 2598-2607, May.
  • Handle: RePEc:eee:enepol:v:38:y:2010:i:5:p:2598-2607

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Nienow, Sara & McNamara, Kevin T. & Gillespie, Andrew R. & Preckel, Paul V., 1999. "A Model for the Economic Evaluation of Plantation Biomass Production for Co-firing with Coal in Electricity Production," Agricultural and Resource Economics Review, Cambridge University Press, vol. 28(01), pages 106-117, April.
    2. Sherrington, Chris & Bartley, Justin & Moran, Dominic, 2008. "Farm-level constraints on the domestic supply of perennial energy crops in the UK," Energy Policy, Elsevier, vol. 36(7), pages 2504-2512, July.
    3. Teresa Serra & David Zilberman & José M. Gil, 2008. "Differential uncertainties and risk attitudes between conventional and organic producers: the case of Spanish arable crop farmers," Agricultural Economics, International Association of Agricultural Economists, vol. 39(2), pages 219-229, September.
    4. Nienow, Sara & McNamara, Kevin T. & Gillespie, Andrew R. & Preckel, Paul V., 1999. "A Model For The Economic Evaluation Of Plantation Biomass Production For Co-Firing With Coal In Electricity Production," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 28(1), April.
    5. Marra, Michele & Pannell, David J. & Abadi Ghadim, Amir, 2003. "The economics of risk, uncertainty and learning in the adoption of new agricultural technologies: where are we on the learning curve?," Agricultural Systems, Elsevier, vol. 75(2-3), pages 215-234.
    6. Smeets, Edward M.W. & Lewandowski, Iris M. & Faaij, André P.C., 2009. "The economical and environmental performance of miscanthus and switchgrass production and supply chains in a European setting," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(6-7), pages 1230-1245, August.
    7. Deverell, Rory & McDonnell, Kevin & Ward, Shane & Devlin, Ger, 2009. "An economic assessment of potential ethanol production pathways in Ireland," Energy Policy, Elsevier, vol. 37(10), pages 3993-4002, October.
    8. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    9. Greiner, Romy & Patterson, Louisa & Miller, Owen, 2009. "Motivations, risk perceptions and adoption of conservation practices by farmers," Agricultural Systems, Elsevier, vol. 99(2-3), pages 86-104, February.
    10. Rowe, Rebecca L. & Street, Nathaniel R. & Taylor, Gail, 2009. "Identifying potential environmental impacts of large-scale deployment of dedicated bioenergy crops in the UK," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(1), pages 271-290, January.
    11. Tharakan, Pradeep J. & Volk, Timothy A. & Lindsey, Christopher A. & Abrahamson, Lawrence P. & White, Edwin H., 2005. "Evaluating the impact of three incentive programs on the economics of cofiring willow biomass with coal in New York State," Energy Policy, Elsevier, vol. 33(3), pages 337-347, February.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Mooney, Daniel F. & Barham, Bradford L. & Lian, Chang, 2013. "Sustainable Biofuels, Marginal Agricultural Lands, and Farm Supply Response: Micro-Evidence for Southwest Wisconsin," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150510, Agricultural and Applied Economics Association.
    2. Witzel, Carl-Philipp & Finger, Robert, 2016. "Economic evaluation of Miscanthus production – A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 681-696.
    3. Anand, Mohit & Duffy, Patricia & Bransby, David, 2017. "Will switchgrass as a bio-crop be adopted by the farmers?," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252724, Southern Agricultural Economics Association.
    4. repec:eee:enepol:v:107:y:2017:i:c:p:548-560 is not listed on IDEAS
    5. Yang, Xi & Paulson, Nicholas D. & Khanna, Madhu, 2012. "Optimal Contracts to Induce Biomass Production under Risk," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124699, Agricultural and Applied Economics Association.
    6. Lescot, Jean-Marie & Rousset, Sylvain & Souville, Genevieve, 2011. "Assessing Investment in Precision Farming for Reducing Pesticide Use in French Viticulture," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114387, European Association of Agricultural Economists.
    7. Mark, Tyler B. & Detre, Joshua D. & Darby, Paul M. & Salassi, Michael E., 2014. "Facilitating small grain production system innovation in the Western Cape, South Africa," International Journal of Agricultural Management, Institute of Agricultural Management;International Farm Management Association, vol. 3(2), January.
    8. Clancy, D. & Breen, J.P. & Thorne, F. & Wallace, M., 2012. "The influence of a Renewable Energy Feed in Tariff on the decision to produce biomass crops in Ireland," Energy Policy, Elsevier, vol. 41(C), pages 412-421.
    9. Glithero, N.J. & Wilson, P. & Ramsden, S.J., 2015. "Optimal combinable and dedicated energy crop scenarios for marginal land," Applied Energy, Elsevier, pages 82-91.
    10. Glithero, Neryssa J. & Wilson, Paul & Ramsden, Stephen J., 2013. "Prospects for arable farm uptake of Short Rotation Coppice willow and miscanthus in England," Applied Energy, Elsevier, pages 209-218.
    11. repec:eee:eneeco:v:64:y:2017:i:c:p:321-334 is not listed on IDEAS
    12. Qiu, Yueming & Colson, Gregory & Grebitus, Carola, 2014. "Risk preferences and purchase of energy-efficient technologies in the residential sector," Ecological Economics, Elsevier, vol. 107(C), pages 216-229.
    13. Jensen, Kimberly L. & English, Burton C. & Clark, Christopher D. & Menard, R. Jamey, 2011. "Preferences for Marketing Arrangements by Potential Switchgrass Growers," Journal of Cooperatives, NCERA-210, vol. 25.
    14. Skevas, Theodoros & Swinton, Scott M. & Tanner, Sophia & Sanford, Gregg & Thelen, Kurt, 2015. "Investment risk in bioenergy crops," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205440, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    15. Vyn, Richard J. & Virani, Tasneem & Deen, Bill, 2012. "Examining the economic feasibility of miscanthus in Ontario: An application to the greenhouse industry," Energy Policy, Elsevier, vol. 50(C), pages 669-676.
    16. Smith, David, 2016. "Subjective Risks and Barriers to Perennial Bioenergy Production: Estimating a Structural Model with Data from a Hypothetical Market Experiment," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236343, Agricultural and Applied Economics Association.
    17. Chamberlain, Jim F. & Miller, Shelie A., 2012. "Policy incentives for switchgrass production using valuation of non-market ecosystem services," Energy Policy, Elsevier, vol. 48(C), pages 526-536.
    18. P. Mathiou & Stelios Rozakis & Rafal Pudelko & A. Faber, 2012. "Economic and spatial modelling for estimating supply of perennial crops’ biomass in Poland," Working Papers 2012-2, Agricultural University of Athens, Department Of Agricultural Economics.
    19. Xu, Pei & Wang, Zhigang, 2012. "Factors Affect Chinese Producers' Adoption of a New Production Technology: Survey Results from Chinese Fruits Producers," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 13(2), June.
    20. P. Mathiou & Stelios Rozakis & Rafal Pudelko & A. Faber & A. Petsakos, 2014. "Utility maximising supply response: the case of perennial biomass plantations in Poland," Working Papers 2014-3, Agricultural University of Athens, Department Of Agricultural Economics.
    21. Johnson, Andra & Butler, Charles, 2015. "Assessing Small and Medium-Sized Farmers' Willingness to Produce Alternative Biofuel Feedstocks," Professional Agricultural Workers Journal (PAWJ), Professional Agricultural Workers Conference, vol. 3(1).
    22. Laure Bamière, 2014. "A spatially explicit model to analyse the regional supply of ligno-cellulosic biomass," Working Papers 2014/01, INRA, Economie Publique.
    23. Krasovskii, Andrey & Khabarov, Nikolay & Obersteiner, Michael, 2016. "Fair pricing of REDD-based emission offsets under risk preferences and benefit-sharing," Energy Policy, Elsevier, vol. 96(C), pages 193-205.
    24. Miao, Ruiqing & Khanna, Madhu, 2015. "Costs of Meeting the Cellulosic Biofuel Mandate with an Energy Crop with Establishment Cost and Yield Risk: Implications for Policy," 2015 Conference, August 9-14, 2015, Milan, Italy 212458, International Association of Agricultural Economists.
    25. Adams, P.W.R. & Lindegaard, K., 2016. "A critical appraisal of the effectiveness of UK perennial energy crops policy since 1990," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 188-202.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:38:y:2010:i:5:p:2598-2607. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.