Agents for diffusion of agricultural innovations for environmental outcomes

In New Zealand, local governments are tasked with both sustainably managing natural resources and supporting adoption of practices and technologies for environmental outcomes. Unfortunately, farmers in New Zealand lack trust in advice on environmental performance provided by local governments. Hence, local governments may seek to partner with others to disseminate information about environmentally friendly practices and technologies to farmers. Empirical evidence indicates that New Zealand farmers are more likely to adopt new practices after seeing them successfully demonstrated; therefore, local government would do well to partner with those who have tried the practices themselves and those with large farmer networks. In this paper, we use unique survey data to identify the characteristics of such “innovators” and “connectors”. We also identify the characteristics of individuals who trust environmental information provided by local governments. We find that sex, age, education level, financial robustness, farm size, and the number of distinct land uses are correlated with both innovativeness and connectedness. However, among these characteristics, only education and financial robustness predict trust in environmental information provided by local governments.     

Values,trust, and management in New Zealand agriculture

This study provides empirical evidence of the link between outlook and practice among farmers, foresters, and growers in New Zealand. Specifically, we use a large, nationally representative survey to assess how foci on production and environmental outcomes influence the adoption of six good management practices aimed at increasing agricultural sustainability. We then show that while environmentally oriented and production-oriented decision-makers are statistically more prepared to take risks, all rural decision-makers are more likely to adopt new technologies and good practices after seeing their relative advantages successfully demonstrated. Next, we show that social and professional networks are small, often limited to five or fewer operators, which begs the question about how the risk-averse operators become informed about good practice. Hence, we ultimately analyse trust in order to identify other credible demonstrators or informants. We find that veterinarians are the most trusted source of information and that government (at all levels) is the least.     

Adoption of erosion management practices in New Zealand

Soil erosion is a serious environmental threat to New Zealand’s agricultural sector. Economic costs of soil erosion are significant and the costs of adopting mitigation and management practices, given the targets set by environmetal policy, do not spread uniformly across space, economic activities and types of erosion processes. Management practices have been widely employed by farmers and promoted by several policy programs. Practices are not mutually exclusive and could be jointly adopted by comparing productivity gains against costs of implementation. However, research on the identification of the drivers of adoption is scarce in New Zealand. To identify the determinants of adoption of management practices in New Zealand farms, we combine novel survey information with data on climate and erosion in a multivariate probit framework. This framework allows identification of potential complementarity or substitution between management practices. We find significant and heterogeneous effects from erosion levels, temperature, wind velocity and primary land uses on the adoption of any of the practices. In addition, we also find significant complementarities between management practices. The results of this study are important because the complementarities relate to external effects of erosion mitigation which can help to promote public acceptability of mitigation policies.     

The influence of farm input subsidies on the adoption of natural resource management technologies

Farm input subsidies are often criticised on economic and ecological grounds. The promotion of natural resource management (NRM) technologies is widely seen as more sustainable to increase agricultural productivity and food security. Relatively little is known about how input subsidies affect farmers’ decisions to adopt NRM technologies. There are concerns of incompatibility, because NRM technologies are one strategy to reduce the use of external inputs in intensive production systems. However, in smallholder systems of Africa, where the average use of external inputs is low, there may possibly be interesting complementarities. Here, we analyse the situation of Malawi's Farm Input Subsidy Program (FISP). Using panel data from smallholder farm households, we develop a multivariate probit model and examine how FISP participation affects farmers’ decisions to adopt various NRM technologies, such as intercropping of maize with legumes, use of organic manure, water conservation practices and vegetative strips. As expected, FISP increases the use of inorganic fertilizer and improved maize seeds. Yet, we also observe a positive association between FISP and the adoption of certain NRM technologies. For other NRM technologies, we find no significant effect. We conclude that input subsidies and the promotion of NRM technologies can be compatible strategies.     

Farmers’ objectives as determinants of organic farming adoption: the case of Catalonian vineyard production

This article assesses the decision to adopt organic farming practices. We use Duration Analysis (DA) to determine why farmers adopt organic farming practices and what influences the timing of adoption. We extend previous studies by including farmers’ objectives, risk preferences, and agricultural policies as covariates in the DA model. The Analytical Hierarchy Process is used as a multicriteria decision‐making methodology to measure farmers’ objectives. The empirical analysis uses farm‐level data from a sample of vineyard farms in the Spanish region of Catalonia. Farmers’ objectives are found to influence the conversion decision. Moreover, farmers who are not risk averse are more likely to adopt organic farming. Results point to the policy changes that have been most relevant in motivating adoption of organic practices.     

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.     

Conservation practice complementarity and timing of on-farm adoption

The adoption of conservation practices is a dynamic process. Factors that vary over time can affect farmers’ decision to adopt and adoption timing. We used a duration model to evaluate the farmer's adoption time for continuous no-till (CNT), cover crops (CCs), and the variable-rate application of inputs (VRA). We found that producers who had previously adopted soil conservation practices were more likely to adopt additional complementary practices. Farmers using crop rotation adopted CNT and CCs approximately 48% and 62% faster than farmers without a crop rotation, respectively. The CC adoption time was also reduced by 70% for farmers who had adopted CNT. Complementarities between conservation practices may enhance the benefits from adoption and allow farmers to adopt bundles of conservation practices more quickly over time. This can be taken advantage of in conservation programs by promoting or requiring practices first that enhance adoption of other practices. We also found important heterogeneity in the adoption speed associated with farm management characteristics, producers’ attitudes, weather patterns, and crop prices.     

The Effect of Mandatory Agro‐Environmental Policy on Farm Fertiliser and Pesticide Expenditure

EU farmers are subject to mandatory cross‐compliance measures, requiring them to meet environmental conditions to be eligible for public support. These obligations reinforce incentives for farmers to change their behaviour towards the environment. We apply quasi‐experimental methods to measure the causal relationship between cross‐compliance and some specific farm environmental performance. We find that cross‐compliance reduced farm fertiliser and pesticide expenditure. This result also holds for farmers who participated in other voluntary agro‐environmental schemes. However, the results do not support our expectations that farmers who relied on larger shares of public payments had a stronger motivation to improve their environmental performance.     

Yield Effects of Tissue Culture Bananas in Kenya: Accounting for Selection Bias and the Role of Complementary Inputs

We analyse yield effects of tissue culture (TC) banana technology in the Kenyan small farm sector, using recent survey data and an endogenous switching regression approach. TC banana plantlets, which are free from pests and diseases, have been introduced in East Africa since the late 1990s. Although field experiments show significant yield advantages over traditional banana suckers, a rigorous assessment of impacts in farmers’ fields is still outstanding. A comparison of mean yield levels between TC adopters and non‐adopters in our sample shows no significant difference. However, we find evidence of negative selection bias, indicating that farmers with lower than average yields are more likely to adopt TC. Controlling for this bias results in a positive and significant TC net yield gain of 7%. We also find that TC technology is more knowledge intensive and more responsive to irrigation than traditional bananas. Simulations show that improving access to irrigation could lift TC productivity gains to above 20%. The analytical approach developed and applied here and the finding of negative selection bias may also be relevant for the evaluation of other agricultural technologies.     

The role of dairy company policies in support of farm green infrastructure in the absence of government stewardship payments

Intensive dairy farming has substantial impacts on freshwater and terrestrial ecosystems. Determining how to mitigate them while increasing production is driving the quest for sustainable milk production internationally. Green infrastructure (G.I.) provides private and public ecosystem services, including mitigation of farming environmental impacts. However, there are implementation barriers among farmers. New Zealand government supports farmer self-regulation as long as farmers meet environmental targets. Farmers are neither compensated for reducing environmental impacts, nor for setting aside G.I. in support of nature conservation. Dairy companies are under increasing pressure to ensure socially acceptable milk production practices among farmer suppliers. They may play a role in encouraging farmers to implement G.I. as a way of helping farmers meet regulatory compliance, and best farming practice. Using a content analysis of company policies, the role of dairy companies in encouraging G.I. among farmers is explored. Results indicate companies are concerned about the effects, and perception, of poor environmental farming practices on their profitability, and have developed some riparian G.I. policies, with government and farmer support. However, policies are farm-focused and are limited to one year, and thus lack the capacity to encourage G.I. in support of key ecosystem services, such as water cleansing and support for indigenous biodiversity that require landscape scaled networks and longer periods. Even at the farm scale, a majority of companies lack policies that encourage significant G.I. networks. Policies suggest companies, and by extension farmers, lack sufficient motivation to protect or restore them voluntarily. Under these conditions, significant G.I. is unlikely to develop under self-regulation, unless supplemented through motivating government stewardship payments.     

Does mixed crop‐livestock farming lead to less diversified diets among smallholders? Evidence from Laos

Malnourishment continues to remain a challenge in developing countries. As the undernourished are largely smallholder farmers, it is widely assumed that farm diversification and mixed crop‐livestock agricultural systems can help alleviate this problem. However, empirical evidence in this context is limited. Hence, we use a two‐year panel's data from Laos to examine whether farm production diversity as well as a mixed crop‐livestock farming system improves household dietary diversity among smallholder farmer. The results from the fixed effects regression indicate that although farm production diversity does lead to a higher dietary diversity, the effect diminishes with continued farm diversification. The counterfactual analysis from the endogenous switching regression reveals that mixed crop‐livestock farming systems do not necessarily enhance dietary diversity. However, we further find that purchasing food from the markets plays an important role in enhancing the dietary diversity of rural smallholder farmers.     

The Diversity of Farmers' Risk Management Strategies in a Deregulated New Zealand Environment

In this paper, the results of a nation-wide survey of New Zealand sheep and beef farmers are presented. Multivariate statistical techniques are used to identify groups of farmers who differ in their risk management practices. Five groups are identified. They are labelled income risk reducers, capital managers, part-timers, debt and market risk managers, and production managers. These groups differ in their perceptions of risk sources and in some farm and farmer characteristics. Reasons for these differences are identified and discussed in the context of deregulation.     

Bias from Farmer Self‐Selection in Genetically Modified Crop Productivity Estimates: Evidence from Indian Data

In the continuing debate over the impact of genetically modified (GM) crops on farmers of developing countries, it is important to accurately measure magnitudes such as farm‐level yield gains from GM crop adoption. Yet most farm‐level studies in the literature do not control for farmer self‐selection, a potentially important source of bias in such estimates. We use farm‐level panel data from Indian cotton farmers to investigate the yield effect of GM insect‐resistant cotton. We explicitly take into account the fact that the choice of crop variety is an endogenous variable which might lead to bias from self‐selection. A production function is estimated using a fixed‐effects model to control for selection bias. Our results show that efficient farmers adopt Bacillus thuringiensis (Bt) cotton at a higher rate than their less efficient peers. This suggests that cross‐sectional estimates of the yield effect of Bt cotton, which do not control for self‐selection effects, are likely to be biased upwards. However, after controlling for selection bias, we still find that there is a significant positive yield effect from adoption of Bt cotton that more than offsets the additional cost of Bt seed.     

Farmer perspectives of the on-farm and off-farm pros and cons of planted multifunctional riparian margins

The planting of riparian margins is a policy option for pastoral farmers in response to land use induced environmental issues such as declining water quality, stream bank erosion, and loss of aquatic and terrestrial habitat. We elicited the views and experiences as to pros and cons of planting riparian margins from two sets of dairy farmers from Taranaki, New Zealand: those who are or have planted riparian margins, and those who have not yet done so. Those farmers who have planted riparian margins identified 21 positive aspects of riparian margin plantings and 11 negative aspects of riparian margin plantings. Perceived benefits identified by this group include water quality, increased biodiversity, the provision of cultural ecosystem services, immediate direct benefits to farm management and the farm system, and in some instances increased productivity on-farm. In contrast, those farmers that had fenced but not planted their riparian margins did not consider that riparian margin plantings could add further benefits to that which could be achieved by excluding stock from waterways, and associated only negative perceptions with riparian margin plantings. Planting riparian margins is not cost neutral and will not deliver anticipated environmental benefits in every situation. However, we argue that riparian margin plantings are an important ecological infrastructure investment that needs to be captured within a wider policy framework, the benefits of which extend beyond the mitigation of a single negative externality generated by land use practices, such as nutrient loss, and contribute to a multifunctional landscape.     

The impact of decoupled subsidies on productivity in agriculture: a cross‐country analysis using microdata

The decoupling of direct payments from production introduced in the reform of the Common Agricultural Policy is expected to make production decisions more market‐oriented and farmers more productive. However, ex‐post analyses of the productivity of farms have yet to uncover any evidence of a positive impact of the decoupling policy on farm productivity. Using Irish, Danish, and Dutch farm‐level data, we identify whether the decoupling policy has contributed to productivity growth in agriculture and farm product adjustment behavior. We find some evidence that the decoupling policy had significant positive effects on farm productivity and behavioral changes related to farm specialization.     

How training and innovation link to farm performance: a structural equation analysis

The complexity of modern farm management places great demands on the skill, knowledge and capability of farm managers and their families. Keeping abreast of emerging technologies and innovations that can affect each key farm enterprise, and knowing how best to marshal the resources required for profitable farm production, are key tasks of farm management. This study draws on a longitudinal data set of 240 broadacre farmers to compare and analyse their farm performance over a decade. Using structural equation modelling, we examine relationships between the farm family's involvement in training, their human capital, their use of various innovations and ultimately the linkages of these factors to farm financial and productivity performance. Several statistically significant inter‐relationships are found, and some factors are shown to have significant positive links to farm performance. We find that training undertaken by the farm family, the farm family's human capital and their use of innovations, particularly key cropping innovations, have significant beneficial impacts on farm performance. The farmer's skills in time and organisational management, their engagement in business planning and the unique environmental characteristics of the farm also significantly and positively influence farm performance.     

Does carbon farming provide a cost‐effective option to mitigate GHG emissions? Evidence from China

In this study, we apply a whole farm bioeconomic analysis to explore the changes in land use, farm practices and on‐farm greenhouse gas (GHG) emission under varying levels of agricultural greenhouse gas abatement incentives in the form of a carbon tax for a semi‐arid crop‐livestock farming system in China's Loess Plateau. Our results show that the optimised agricultural enterprises move towards being cropping‐dominated reducing on‐farm emission since livestock perform is the major source of emission. Farmers employ less oats‐based and rapeseed‐based rotations but more dry pea‐based rotations in the optimal enterprise mix. A substantial reduction in on‐farm greenhouse gas emission can be achieved at low cost with a small increase in carbon incentives. Our estimates indicate that crop‐livestock farmers in China's Loess Plateau may reduce their on‐farm GHG emission between 16.6 and 33 per cent with marginal abatement costs <￥100/t CO₂e and ￥150/t CO₂e in 2015 Chinese Yuan. The analysis implies that reducing greenhouse gas emission in China's semi‐arid crop‐livestock agriculture is potentially a low‐cost option.     

Renters,landlords, and farmland stewardship

Are farmers better stewards of the land they own than the land they rent from others? We answer this question using a data set that identifies Ontario farmers’ conservation practices on their own land as well as the land they rent. Using a fixed‐effects regression approach, we find that the role of tenure varies for different types of conservation practices. Farmers were found to be just as likely to adopt a machinery‐related practice such as conservation tillage on their rented land as that land which they own. On the other hand, farmers were found to be less likely to adopt site‐specific conservation practices such as planting cover crops on rented land. However, this effect diminishes as the expected length of the rental relationship increases when the landlord has a farming background.     

Worth the Risk? The Behavioural Path to Well‐Being

There is increasing interest in the ‘economics of happiness’, reflected in the volume of articles appearing in mainstream economics journals exploring the major determinants of self‐reported well‐being. We contribute by exploring the factors influencing how satisfied farmers are with their quality of life. We find that farm income, subjective perceptions relating to the adequacy of household income, debt, health and personal characteristics such as age and relationship status are significantly associated with farmers’ self‐reported life satisfaction. While significantly associated with farm income, farm structural variables such as farm size, farm type and the presence of a farm successor were not found to be significantly related with life satisfaction. Our results also suggest that farmers who are more risk averse enjoy significantly lower levels of both life satisfaction and farm income than their more risk seeking or risk neutral counterparts. We suggest that, in the same way that risk aversion inhibits farmers from making choices that could lead to an increase in their income, it may also constrain farmers (and the wider public at large) from engaging in certain types of behaviours that could lead to an increase in their self‐reported quality of life. Finally, we find that while farm income is significantly related to self‐reported life satisfaction, the direct correlation between these variables is weak, suggesting that farmer life satisfaction can be distinct from business success.     

The impact of soil conservation and output diversification on farm income in Central American hillside farming

This article analyzes the determinants of farm income among hillside farmers participating in natural resource management projects in El Salvador and Honduras. The farm income function was evaluated using a system of equations in which income is determined simultaneously by the farmer's decision to adopt soil conservation technologies and by the level of diversification (number of agricultural activities) on the farm. The database used comes from surveys administered to 678 beneficiaries of these projects during 2002. The econometric results suggest that all the variables related directly to land use (i.e., output diversification, soil conservation practices and structures, and the adoption of forestry systems) have a positive and statistically significant association with farm income. Also, farmers who own land enjoy higher farm incomes than those who do not. The results indicate that when investing in natural resource management projects, governments and multilateral development agencies should pay close attention to output diversification, land tenure, and human capital formation as effective instruments in increasing farm income.