Farmers Need Custom Incentives to Grow Bioenergy Crops

By Andi Anderson

A recent study by researchers at the Center for Advanced Bioenergy and Bioproducts Innovation (CABBI) highlights that risk-averse and credit-constrained farmers need customized financial incentives to adopt bioenergy crops that support sustainable aviation fuel (SAF) production.

Sustainable aviation fuels made from biomass such as corn stover, switchgrass, or miscanthus can significantly reduce carbon emissions. However, the high costs of establishing these crops, delayed returns, and price risks make them less appealing to farmers with limited resources or low risk tolerance.

The CABBI research team developed an advanced economic model that considered yield and price risks for multiple crop options across different U.S. regions. Their analysis revealed that farmers generally prefer safer, lower-yield crops like switchgrass and corn stover over higher-yield, riskier alternatives such as miscanthus.

According to the study, published in Applied Economic Perspectives and Policy, these preferences lead to reduced overall SAF production. Annual carbon payment programs were found to increase SAF feedstock production mainly from switchgrass and corn stover. Meanwhile, upfront carbon payments—where farmers receive financial support at the beginning of the planting cycle—proved more effective in encouraging the cultivation of miscanthus, a crop with higher carbon mitigation potential.

The findings underscore the importance of designing policies that reflect the financial and psychological realities of farmers. “Incentive structures must match farmers’ risk preferences and credit limitations to expand SAF feedstock production efficiently,” the researchers noted.

By aligning carbon payment strategies with farmer behavior, policymakers could unlock the full potential of bioenergy crops to support the aviation sector’s transition toward sustainable fuel solutions and broader climate goals.

Photo Credit: istock-dusanpetkovic