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.