Does agro-processing adoption affect farm income and farm diversification? Empirical evidence from Taiwan

Abstract

Purpose

The purpose of this paper is to identify the factors associated with the adoption of agro-processing methods and to estimate their impact on farm income and farm diversification.

Design/methodology/approach

Using a large-scale sample of 12,122 special crop farm households drawn from the 2015 Agricultural Census Survey in Taiwan, the semiparametric multivalued treatment effect model was estimated.

Findings

The authors found that agro-processing farm households obtain higher farm incomes than non-agro-processing farm households. Among the agro-processing methods, self-processing generates higher farm income than outsourced-processing. Moreover, farm households that adopt either agro-processing method are more likely to diversify into agritourism and other agribusinesses than non-agro-processing farms.

Research limitations/implications

The authors could only access data on farm income and not on agro-processing costs. Future studies may address the impact of agro-processing on farm profitability if relevant data are available.

Originality/value

Very few studies have examined the relationship between agro-processing, farm income and farm diversification. To the best of the authors’ knowledge, this is one of the first papers to examine the impact of different agro-processing practices on farm income and farm diversification.

Citation

Lin, L. and Chang, H.-H. (2021), "Does agro-processing adoption affect farm income and farm diversification? Empirical evidence from Taiwan", Journal of Agribusiness in Developing and Emerging Economies, Vol. 11 No. 5, pp. 567-577. https://doi.org/10.1108/JADEE-07-2020-0157