In this paper, we develop an optimization model using linear programming, in order to get maximum output of surplus biomass (agricultural residue) excluding the biomass assigned for fuel and fodder for animals, by suitably allocating the land area for the cultivation of various crops subject to meeting the food requirements of the population with regard to cereals, pulses, oilseeds, sugar and vegetables in Nilakkottai Block of Dindigul District, Tamil Nadu, India. The model also takes into consideration utilization of the available resources such as human labour, animal power and tractor power in this block. It is also concluded that the existing surplus biomass can be utilized for the generation of electricity to an extent of 28 056 MWh in order to meet the power requirement of the block to an extent of 84 percentage. As a result of applying this model, the generation of power from the surplus biomass is increased to 38 321 MWh in order to meet the power demand of the block to an extent of 115%. The model is solved under three different scenarios namely existing land use pattern for the year 1996, by increasing the irrigated area under cultivation in Karif and Rabi seasons. HYPER-LINDO software package is used to solve the model using a pentium computer system.