Analysis of farmers' willingness to participate in pasture grazing programs: Results from a discrete choice experiment with German dairy farmers

Abstract

Over the last decades, the usage of pasture for grazing of dairy cows has decreased considerably. Pasture grazing programs initiated by dairy companies try to counteract this trend. The present paper investigates farmers' willingness to participate in such grazing programs. A special aim was to quantify the price premiums farmers require for program participation and to identify determinants influencing the premium level. The empirical analysis is based on a discrete choice experiment with 293 German dairy farmers. Models are estimated in terms of willingness to accept. It was found that farmers have no substantial preference for whether the pasture grazing program is financed by the food industry, a governmental scheme, or the dairy company. However, an extension of the annual or daily grazing period results in a decreasing willingness of farmers to participate in a pasture grazing program. In addition, farmers decline the option of a feeding standard prescribing the use of only green fodder when offered an alternative program that merely reduces the amount of concentrated feed or maize silage in the diet. Farmers' with an aversion toward program participation have a significant higher price demand for fulfilling the program requirements. Furthermore, the required price premiums increase with growing milk yields and a greater number of cows kept on the farm. However, if the availability of pasture is high, farmers are more likely to participate. The estimated price premiums and factors influencing farmers' willingness to participate found by this study should be considered by dairies and policymakers to gain insights into the design of possible pasture grazing programs from the perspective of farmers. Thereby, paying price premiums to farmers may increase the attractiveness of pasture grazing, which could finally result in an extended usage of pasture grazing.

Keywords: discrete choice experiment; farmers' preferences; pasture grazing program; willingness to accept.