Farmers’ preferences for climate change adaptation strategies in arable farming

Christian Stettera, Carla Cronauerb

a Agricultural Economics and Policy Group, ETH Zurich
b Potsdam Institute for Climate Impact Research (PIK)

2023-04-21

Many arable crop farms suffer from climate change…

  • Agriculture is one of the most vulnerable sectors to the negative effects of climate change.

Global farming productivity is 21% lower than it could have been without climate change [1]

  • Arable crop cultivation is particularly susceptible to climate change due to its unprotected weather exposure.

Crop yield losses [2] – Product quality loss [3] – Financial losses [4]

  • Crop farms need to offset these negative impacts by adapting to the changing climate
  • Unprecedented rate and intensity of climate change and associated uncertainty will test the adaptability of farmers [5]

What does the literature say?

There are ample adaptation options for farmers:
  • Irrigation
  • Use of resistant crop varieties
  • Insurance
  • Diversification
  • …
Many studies have focused on:
  • Identifying the factors that drive farmers to adopt specific adaptation strategies [6].
  • The impact of adaptation itself [7]
  • Or both [8].
  • More generally measuring the extent and potential of adaptation on the whole [9].
  • Analyzing the (cost-)effectiveness of specific climate change adaptation strategies in agriculture [10].

… why yet another study on this topic?

The need to understand farmers’ preferences among adaptation measures

  • Many previous studies have been criticized for not sufficiently considering the needs and preferences of farmers in the context of climate change adaptation [11]


  • Many previous studies either

    • Focused on one specific adaptation measure
    • Measured adaptation in an abstract sense


  • This might not reflect farmers’ actual decision making process

Given the abundance of available adaptation options and given farmers’ limited resources, understanding how they evaluate and prioritize among multiple available adaptation measures is key for successful implementation.

Research question and approach


Which climate change adaptation activities related to crop cultivation are the most (and least) preferred by farmers?

Approach
  • Best-Worst-Scaling (BWS) experiment to determine the relative importance that farmers attach to different adaptation strategies within the context of German arable crop farming (preference ranking).


Results outlook

  • Farmers tend to prefer low-cost, incremental adaptation measures

  • Diversifying one’s crop rotation is most preferred

  • Insurance is consistently the least preferred adaptation measure

  • There exists preference heterogeneity, esp. between organic & conventional farms

Research approach: Overview


G A 1. Inventory of potential adaptation options B 2. Filter and aggregate most relevant options A->B C 3. Fit in balanced incomplete block design B->C D 4. Generate BWS case 1 experiment C->D E 5. Pre-test experiment D->E F 6. Conduct survey & experiment E->F G 7. Empirical analysis F->G

Research design (i)

Adaptation options inventory

Extensive literature search: >250 measures

Filter and aggregate most relevant options

Based on literature, interviews with farmers and stakeholders

BIBD & BWS object case

Balanced and orthogonal

4-6 options presented per decision situation are optimal

Led to 13 adaptation measures in this study, each appearing 4 times and each pair of measures appearing once

Final list of adaptation measures

Adjustment of management rhythm

Use of irrigation

Insurance

Diversify crop rotation

Business diversification

Use of drought-resistant crops

Use of catch crops

Adjustment of fertilizer use

Adjustment of farm chemicals use

Use of precision farming

Use of mixed crops

Conservation tillage

Use of drought-resistant crop varieties

Research design (ii)

Generate BWS experiment

The respondent was asked to choose the most and least preferred

Brief description of each of the measures as provided to respondents

Each respondent was shown 13 choice sets

Conduct survey & experiment

The survey was conducted online from January to March 2021

German apprenticing farmers were approached via e-mail

Effective sample size of 698

Empirical analysis

A land user \(n\) obtains a certain level of indirect utility \(U_{nit}\) from an adaptation measure \(i\) in a choice situation \(t\): \[ U_{nit} = V_{nit} + \epsilon_{nit} \]

with a systematic component \(V\) and a random component \(\epsilon\) (unobserved decision-relevant elements):

\[ V_{int}= \sum^{12}_{i=1}\beta_i X_{int} \]

with \(X=1\) if selected as best, \(X=-1\) if selected as worst, 0 otherwise.

The distribution of the coefficient estimates follow: \[ \beta_{in} = \beta_i + \delta_{i1} ProdSys_n + \delta_{i2} Loc_n \\ + \delta_{i3} ManFoc_n + I \Omega_{in} v_{in} \]

with:

  • \(ProdSys=1\) if conventional farm, \(-1\) if organic farm

  • \(Loc=1\) if farm is located in East Germany, \(-1\) if farm is located in West Germany

  • \(ManFoc=1\) if farm is non-specialized crop farm, \(-1\) if farm is specialized crop farm

  • \(\Omega_n = diag(\sigma_1 \ldots \sigma_k)\) captures individual-specific unexplained variation around the mean

Use of simulated ML to estimate different versions of mixed logit models using 1,000 Halton draws to estimate coefficients (preference ranking).

Descriptive statistics

Results (i)

Results (ii): Heterogeneity

Discussion

Tentative comparison of farmers’ preferences with effectiveness and costs as found in the literature.

Adaptation Measure Preference Rank Effectiveness Cost
Diversify crop rotation 1 0/+ -
Conservation tillage 2 0/+ -/0
Use of drought-resistant crops 3 0/+ 0
Use of catch crops 4 0 -
Use of drought-resistant crop varieties 5 0/+ -/0
Adjust management rhythm 6 0 -
Business diversification 7 + -/0/+
Adjustment of fertilizer use 8 + 0
Use of mixed crops 9 0/+ +
Adjustment of farm chemicals use 10 + 0
Use of precision farming 11 0/+ +
Use of irrigation 12 ++ ++
Insurance 13 ++ -/0

Conclusion

  • Closing this gap will be key for successful adaptation to climate change at the farm level


  • Farmers are generally hesitant to adopt transformative measures.


  • Results show that ignoring farmers’ preferences can hamper successful policy measures for adaptation


  • Farmers have heterogeneous preferences










THANK YOU








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References

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