Canadian beef and dairy farmers’ attitudes towards animal vaccines

The willingness to pay (WTP) approach is increasingly being used in different disciplines to assess peoples’ readiness to accept change. This paper assesses the potential for two subunit vaccines for the prevention and control of bovine tuberculosis and paratuberculosis in cattle. A survey of beef and dairy farmers was conducted across Canada to identify factors that influence their WTP for subunit vaccines. Estimated results of the interval‐data model indicate that the size of a farmer’s cattle herd, neighbourhood effect, and buyer recommendations for vaccination significantly influence farmers’ WTP while veterinarians appear to be the most critical pathway for farmers to source information on new vaccine options. The mean willingness to pay amounts for both vaccines reveals that farmers are likely to use the vaccines if the costs are kept at reasonable level.     

Cotton farmers’ willingness to pay for pest management services in northern Benin

This study was carried out to assess cotton farmers’ willingness to pay (WTP) for pest management services in northern Benin. Targeted staggered control (TSC) has been introduced to reduce pesticide use in cotton cropping and generate an estimated benefit of FCFA48,800 (€74.40) per cotton hectare accruing from increased productivity and reduced pesticide cost. However, TSC application requires extra time for pest identification and scouting, and its adoption remains low due to the lack of funding to boost farmers’ awareness and cover training costs. An interval regression model was used to analyze responses to a double‐bounded contingent valuation survey with data collected from 300 cotton farmers. The results showed that 87.3% of cotton farmers were willing to pay for TSC services. Annual WTP per cotton hectare was estimated at FCFA16,962 (€25.80), revealing an existing demand for TSC adoption. Respondents' WTP was driven by farm and socio‐economic characteristics. Financial mechanisms managed by farmers could thus potentially foster technology adoption, and in turn, generate economic and environmental benefits.     

Productivity,credit, risk,and the demand for weather index insurance in smallholder agriculture in Ethiopia

The article explores the relationship between fertilizer use and the demand for weather index insurance (WII) among smallholder farmers in Ethiopia. We examine whether fertilizer use is profitable under current smallholder production conditions, whether risk‐related factors affect fertilizer use, and we estimate the returns to inputs in the agricultural production function in the absence of insurance. We then study how these primitives of agricultural production functions relate to insurance demand. The study compares a survey‐based estimate of willingness to pay with actual uptake for the weather insurance, finding the stated and actual demand to be almost completely uncorrelated. While those with high marginal returns to inputs say they would purchase insurance, only those with low marginal returns actually do, consistent with the stated purpose of the product as input insurance. Insurance demand proves to be highly responsive to the existence and amount of randomly allocated insurance vouchers.     

Risk Attitudes,Social Interactions,and the Willingness to Pay for Genotyping in Dairy Production

Bovine Mastitis is one of the most prevalent and costly production diseases in the dairy industry in Canada and worldwide causing major animal welfare problems, environmental problems, and productivity losses. In this paper, we examine the effects of risk attitudes and social interactions on the willingness to pay (WTP) for genotyping animals for susceptibility to a chronic mastitis trait. We use contingent valuation with double bounded dichotomous choice questions to elicit producers’ WTP. The estimated mean WTP for genotyping is approximately $50 per animal. Compared to the current market prices of commercially available comprehensive genotyping services, this estimate suggests a significant market potential for genotyping to be bundled with economically important disease traits. We also find evidence that both risk attitudes and social interactions have strong effects on the WTP for genotyping. Farmers with higher risk tolerance are willing to pay more for genotyping service. For dairy farmers with more concern about mastitis, risk tolerance has no significant effect on the WTP, while social interactions have a significant effect on the WTP. We also find a strong interaction effect between risk tolerance and social interactions. The findings encourage interest in questions about how risk attitudes, social networks, and their interactions shape the adoption of and the WTP for a novel agricultural technology. La mastite bovine est la maladie de production la plus répandue et la plus coûteuse de l'industrie laitière au Canada et mondialement causant des problèmes en ce qui concerne le bien‐être des animaux, l'environnement et la perte de productivité. Cet article examine les effets de l'attitude à l′égard du risque et des interactions sociales concernant la volonté de payer pour le génotypage d'animaux pour le dépistage de la susceptibilité à posséder le trait de mastite chronique. L'évaluation contingente avec questions à double proposition dichotomique a été utilisée afin d'obtenir la volonté de payer des producteurs. La volonté moyenne estimée de payer pour le génotypage s'élève à approximativement 50 $ par animal. Comparée aux prix courants du marché pour les services commerciaux complets de génotypage, cette estimation suggère un potentiel commercial significatif pour grouper le génotypage à d'autres traits de maladie d'importance économique. Nous trouvons aussi trouvé que les attitudes à l′égard du risque et les interactions sociales avaient un impact significatif sur la volonté de payer pour le génotypage. Les fermiers démontrant une grande tolérance au risque sont disposés à payer plus pour les services de génotypage. Pour les producteurs laitiers préoccupés par la mastite, la tolérance vis‐à‐vis du risque n'a aucun effet sur la volonté de payer, tandis que les interactions sociales en ont une importante. Nous notons aussi un effet significatif d'interaction entre la tolérance pour le risque et les interactions sociales. Les résultats favorisent un questionnement au sujet des attitudes à l′égard du risque, des réseaux sociaux et de leurs interactions, cherchant comment ces derniers guideront l'adoption de nouvelles technologies agricoles et la volonté d'en acquérir.     

“保险+期货”模式与农户增收——基于全国124个县的多期双重差分估计

目的 “保险+期货”作为我国金融支农的重要创新，对农户实现增收起着关键作用。在农产品价格风险成为农户主要风险的背景下，分析“保险+期货”对农户增收的影响路径和效果具有重要的理论和现实意义。方法 文章基于准自然实验的思路，将“保险+期货”试点视作外部冲击，构建多期双重差分模型，采用2011—2020年中国124个县的面板数据，估计“保险+期货”试点对农户增收的影响路径和效果。结果 （1）“保险+期货”试点对农户具有显著的增收效应，使农村居民人均可支配收入平均提高了2.75%。（2）“保险+期货”试点对农户的增收效应存在异质性，对贫困县农户更为明显。（3）“保险+期货”试点对农户的增收效应是逐年递增的，试点第5年增收效应达到上限。结论 建议稳步扩大“保险+期货”试点、优先在脱贫地区开展“保险+期货”试点，并且积极探索建立收入保险。     

Risk aversion in agricultural water management investments in Northern Ghana: experimental evidence

Sub‐Saharan Africa (SSA) is one of the regions in the world most affected by food price volatility and production variability. Poor small‐scale farmers in this region are particularly vulnerable to this variability. As a result, households may be reluctant to adopt new agricultural water management (AWM) technologies when they involve more risk than what they mitigate. Despite risk's role in AWM investments, there have been few attempts to estimate the magnitude and nature of risk aversion in relation to this type of farm decisions. To partially close this gap, this article uses an experimental approach applied to 137 households in Northern Ghana. We find that more than 70% of households are moderately or slightly risk averse. This contrasts with other studies in SSA, where most household decision‐makers exhibit severe to extreme risk aversion. We also find that households that stand to lose as well as gain something from participation in games are less risk averse than households playing gains‐only games. This result suggests that most farmers’ current wealth put them at risk of falling into a poverty trap. Thus, the losses from the riskiest investments on AWM technologies may fall more heavily on the poor, suggesting that additional efforts be given to the creation of viable insurance mechanisms.     

Depressed demand for crop insurance contracts,and a rationale based on third generation Prospect Theory

When actuarially fair insurance for a major risk is available then standard economic theory posits that those subject to the risk should insure. In agriculture, it is common for producers to decline contract offers where presubsidy premiums just cover average losses and subsidies are substantial. This paper seeks to shed light on why demand is curtailed. In a mail survey of U.S. corn and soybean producers we solicited Willingness to Pay (WTP) for actuarially fair insurance at different coverage levels. We find demand to be so low that median WTP is no larger than fair premium when adjusted down by current subsidy rates, which pay for one half or more of most premium charges. WTP as a share of the fair rate is especially low when risk of loss is high. There is limited evidence that respondents appreciate the convex relationship between coverage level and expected indemnity payoff. Third generation Prospect Theory is shown to be consistent with observed findings. In particular, a strong distaste for paying premium can be rationalized by loss aversion. Furthermore, when high revenue outcomes are more likely than not, that is, negative skewness, then higher loss aversion, greater decision weight distortions and greater risk aversion will decrease WTP.     

Managing basis risk with multiscale index insurance

Agricultural index insurance indemnifies a farmer against losses based on an index that is correlated with, but not identical to, her or his individual outcomes. In practice, the level of correlation may be modest, exposing insured farmers to residual, basis risk. In this article, we study the impact of basis risk on the demand for index insurance under risk and compound risk aversion. We simulate the impact of basis risk on the demand for index insurance by Malian cotton farmers using data from field experiments that reveal the distributions of risk and compound risk aversion. The analysis shows that compound risk aversion depresses demand for a conventional index insurance contract some 13 percentage points below what would be predicted based on risk aversion alone. We then analyze an innovative multiscale index insurance contract that reduces basis risk relative to conventional, single‐scale index insurance contract. Simulations indicate that demand for this multiscale contract would be some 40% higher than the demand for an equivalently priced conventional contract in the population of Malian cotton farmers. Finally, we report and discuss the actual uptake of a multiscale contract introduced in Mali.     

新疆棉农对农业面源污染防治的态度和支付意愿研究

农业面源污染问题已经成为我国面临的最严重的环境污染问题之一,农户对农业面源污染防治的态度和支付意愿研究,对于政府制定相关政策措施意义重大。分别采用李克特五点量表、条件价值评估法、多元有序Logistic模型回归等方法对(1)棉农对农业面源污染防治的态度,(2)棉农对农业面源污染防治的支付意愿(WTP),(3)影响棉农支付意愿的社会经济因素进行研究。结果表明:新疆棉农对农业面源污染防治的态度非常积极,但是当与自身利益相冲突时,则趋向于以牺牲环境为代价;新疆每户棉农对农业面源污染防治的支付意愿是113.96元/年,49.64%的被调查者选择的支付区间是[12,60)元/年,累计百分比占70.65%;农户的教育水平和是否参加过农业专业合作组织是新疆农户农业面源污染防治支付意愿的主要影响因素。基于此,得出结论并提出相应的对策建议。     

Coping with systemic risk in index‐based crop insurance

The implementation of index‐based crop insurance is often impeded by the existence of systemic risk of insured losses. We assess the effectiveness of two strategies for coping with systemic risk: regional diversification and securitization with catastrophe (CAT) bonds. The analysis is conducted in an equilibrium pricing framework which allows the optimal price of the insurance and the number of traded contracts to be determined. We also explore the role of basis risk and risk aversion of market agents. The model is applied to a hypothetical area yield insurance for rice producers in northeast China. If yields in two regions are positively correlated, we find that enlarging the insured area leads to higher insurance premiums. Unless capital market investors are very risk averse, a CAT bond written on an area yield index outperforms regional diversification in terms of certainty equivalents of both farmers and insurers.     

Farmers’ risk preferences and pesticide use decisions: evidence from field experiments in China

China faces health and environmental problems associated with the use of agricultural chemicals, including pesticides. While previous studies have found that risk aversion affects pesticide use in China, they have focused primarily on commercial cotton farmers. In this study, we consider the case of smaller, semisubsistence and subsistence farmers in a poor and landlocked province of China (Yunnan). We use a field experiment to measure risk aversion and collect detailed data on farm production and input use to specifically ask whether risk aversion affects pesticide use, and whether this effect differs for subsistence farmers producing exclusively for home consumption versus semisubsistence farmers who produce both for home and the market. We find that risk aversion significantly increases pesticide use, particularly for subsistence farmers and for market plots by semisubsistence farmers. Further, this effect of risk aversion significantly decreases with farm size for subsistence farmers, but not for semisubsistence farmers, implying that pesticide use may be used to ensure sufficient food supply for home consumption. Finally, we find barriers to the use of pesticides for subsistence farmers, both in terms of financial constraints and economies of scale. This finding implies that risk‐mitigation strategies, such as crop insurance, may not target food security concerns of subsistence farmers. Given these different motivations for pesticide use, policymakers may wish to consider effective tools to support rural food security for farmers in the poorer regions of China in order to decrease pesticide use.     

Testing the Consistency Between Standard Contingent Valuation,Repeated Contingent Valuation and Choice Experiments

Choice experiments (CEs) are a relatively new approach to valuing environmental resources. Initial tests of the validity of the approach have either compared benefit estimates generated using CEs with those estimated using contingent valuation (CV) or used more sophisticated hypothesis tests of parameter equality. Although useful, existing tests have been restricted to testing consistency based on a single policy scenario (standard CV). We argue that, although these tests are informative, they fail to take full advantage of the richness of CE data. In particular, CE data allow for the calculation of benefit estimates over a range of policy scenarios (i.e. attribute combinations). A similar range of benefit estimates may be generated by pooling scenarios in a repeated CV study. In this paper, we explore this relationship between CV and CEs by conducting validity tests between a CE model and a repeated CV model over a range of three levels of improved water quality at Clear Lake, IA, USA. Evidence from this test suggests that the CE and CV data are consistent.     

Assessing Consumer and Producer Preferences for Animal Welfare Using a Common Elicitation Format

We assess pig farmers’ willingness‐to‐accept (WTA) higher farm animal welfare (FAW) standards and consumers’ willingness‐to‐pay (WTP) for thus enhanced standards. The analysis is based on discrete choice experiments with nearly identical choice sets for both farmers (N=140) and consumers (N=554). Based on preference estimates from a random parameter logit (RPL) model, supply and demand curves for high‐welfare pork in Germany are estimated and market equilibria are derived for alternative levels of FAW. We find that estimates of consumer WTP are significantly positive for all FAW attributes: consumers value more surface space per pig, more bedding and manipulable material, less surgical interventions and shorter transportation times. In contrast, our model revealed significant producer WTA estimates only for surface area per pig and the amount of bedding material on offer, but not for the other FAW attributes. Farmers who expect to continue farming and engage in direct marketing are more likely to adopt higher FAW standards. Male consumers and those who find price more important than brand, origin or taste are less likely to buy high‐welfare pork, as are consumers who never purchase organic meat products. Market simulations for high‐welfare pork indicate increasing divergence between demand and supply with rising FAW standards. We estimate a market share of 44.6% for pork produced in compliance with an entry‐level FAW programme with standards only slightly above the legal minimum. Programmes with more demanding standards are estimated to gain much smaller market shares.     

Valuing animal genetic resources: a choice modeling application to indigenous cattle in Kenya

In an effort to improve productivity and profits, many farmers have replaced traditional livestock breeds with higher yielding alternatives. While such changes may bring about short‐term economic gains, the loss of traditional livestock breeds could result in the loss of an important genetic resource as a variety of important genetic traits adapted to local conditions gradually become less common in the population. This is a particular problem in Africa, where livestock make a substantial contribution to human livelihoods. Using the example of cattle in Kenya's pastoral livestock markets this study uses a choice experiment approach to investigate buyers' preferences for indigenous breeds such as the Maasai Zebu. The analysis employs a latent class approach to characterize heterogeneity in valuations both within and across respondents buying cattle for breeding, slaughter, or resale. The results show that there are at least three classes of buyers with distinct preferences for cattle traits and that most buyers favor exotic rather than indigenous breeds. Such preferences have implications for the conservation of indigenous cattle in Kenya and in other developing countries and suggest that some form of intervention may be required to ensure the preservation of this important animal genetic resource.     

Willingness to Pay and QALYs: What Can We Learn about Valuing Foodborne Risk?

This paper examines the value of reducing foodborne risk. Previous research on the valuation of health risk has been dominated by the study of mortality risk. However, in most cases foodborne illnesses are non‐fatal, so we focus on individuals' preferences for reducing morbidity risk, while also including a realistic, if remote, chance of death. We use a contingent valuation method on a Swedish sample and we estimate a value of a statistical illness consistent with previous findings in the literature. We also examine how willingness to pay (WTP) varies with the expected change in quality‐adjusted life years (QALYs) and estimate the WTP per QALY. We find that WTP increases with, though less than proportionally to, a change in QALYs. However, our results also suggest that respondents may have found it difficult to evaluate compound risks of both morbidity and mortality simultaneously.     

Purchase of Catastrophe Insurance by Dutch Dairy and Arable Farmers

This article analyzed the impact of risk perception, risk attitude, and other farmer personal and farm characteristics on the actual purchase of catastrophe insurance by Dutch dairy and arable farmers. The specific catastrophe insurance types considered were hail–fire–storm insurance for buildings, disability insurance, crop insurance against hail, storm, and brown rot, and insurance against epidemic animal disease outbreaks. The results suggested that risk perception was a significant variable that influenced purchase of catastrophe insurance by dairy and arable farmers, whereas risk attitude was significant only in arable farming.     

Managing increasing environmental risks through agrobiodiversity and agrienvironmental policies

Agrobiodiversity can provide natural insurance to risk‐averse farmers by reducing the variance of crop yield, and to society at large by reducing the uncertainty in the provision of public‐good ecosystem services, for example, CO₂ storage. We analyze the choice of agrobiodiversity by risk‐averse farmers who have access to financial insurance, and study the implications for agrienvironmental policy design when on‐farm agrobiodiversity generates a positive risk externality. While increasing environmental risk leads private farmers to increase their level of on‐farm agrobiodiversity, the level of agrobiodiversity in the laissez‐faire equilibrium remains inefficiently low. We show how either one of the two agrienvironmental policy instruments can cure this risk‐related market failure: an ex ante Pigouvian subsidy on on‐farm agrobiodiversity and an ex post payment‐by‐result for the actual provision of public environmental benefits. In the absence of regulation, welfare may increase rather than decrease with increasing environmental risk, if the agroecosystem is characterized by a high natural insurance function, low costs, and large external benefits of agrobiodiversity.     

Choice of Rice Production Practices in Ghana: A Comparison of Willingness to Pay and Preference Space Estimates

Rice has been identified as an important food security crop in Ghana. However, there is a production deficit and new technologies to reduce the deficit are not widely adopted. Although poor adoption by farmers’ is often linked to constraints such as access to information, farmers’ perceptions of the technologies are also important. We apply an advanced discrete choice experiment to evaluate farmers’ preferences for rice production practices. Specifically, we generate willingness to pay (WTP) estimates using willingness to pay space (WS) and compare these with values from the indirect or preference space (PS) method. Our modelling also accounts for the effects on WTP estimates of farmers’ stated attribute importance (SAI) information. Empirical results from WS and PS models reveal that on average, farmers value higher yields and are negatively affected by higher risk of crop failure and labour requirements. Comparing the performance of the two models, we find the WS model provides a superior fit to our data and reduces the likelihood of producing implausible WTP estimates. Further, SAI inclusion did not produce much variation in our WTP estimates.     

Crop insurance policies and purchases in France

While many crop insurance systems have been reformed around the world, few academic researches have addressed the determinants of the decision on crop insurance at the farm's micro level. In this article, both the financial and the agricultural literature lead to the identification of many rationales for the crop insurance decision. Using data from the period 2003–2006 on a representative survey of French farms (FADN‐RICA), we investigate the different factors that incite farmers to insure against crop risk. We emphasize that the highest risk farms are more likely to have insurance and this decision is positively related to the past amount of claims. Insurance is subscribed by larger farms because insurance appears too expensive for smaller farms, which are indeed naturally less diversified. Interestingly, financial variables (such as capital structure or return on investment) do not significantly determine the insurance decision.     

The influence of direct payments on farmers’ hail insurance decisions

We analyze determinants of hail insurance use of Swiss farmers, using FADN panel data covering the period 1990–2009. Mixed effect logistic regression models are estimated to identify the most important farm and farmer characteristics that trigger insurance use. In addition, information on local hail risk is taken into account in these models. It shows that larger farms, with specialization in crop production, and with larger local hail risks are more likely to adopt the hail insurance. Moreover, insurance users are usually older and better educated. Since the early 1990s, Swiss agricultural policy has reduced price support and introduced general and ecological direct payments. This has led to a much higher importance of direct payments for farmers’ incomes. Our analysis shows that this development has contributed to decreasing hail insurance adoption rates in Switzerland over the period considered. Our results indicate that the larger the share of direct payments for total farm revenue, the less attractive is insurance as a risk management strategy for farmers. This interdependency should be explicitly considered by agricultural policy in the design of support mechanisms.