Description of valuation study conducted – SUPPLY

The study was conducted in the context of intensification of agricultural land use and abandonment of traditional agricultural practices, that led to the decline of biodiversity and traditional rural scenery in the Biebrza Valley. A discrete choice experiment was conducted on a group of 470 farmers who make managerial decisions in two Natura2000 sites located in the Biebrza Valley. We selected relevant agri-environmental schemes that are introduced on arable land – improved utilization of fertilizers, crop diversification, catch crops; basic or extended protection of peatland; extensive use of meadows; the reduction of livestock farming intensity. The main goal was to improve understanding of farmers’ preferences: What characteristics of the schemes increase farmers’ participation in relevant practices? What is the difference between farmers’ willingness to accept for different practices? Can information be used to incentivize farmers to participate in the contracts (measured with experimentally controlled information treatments)? Which factors can explain heterogeneity in farmers’ preferences and how these factors are related to different schemes?  In particular, farmers’ willingness to accept is explained using farms’ characteristics and measures of environmental knowledge.

PG valuation results – SUPPLY

In summary, substantive differences were found in mean willingness to accept for 7 agri-environmental practices (as presented in the Table below) and strong heterogeneity of preferences is observed (standard deviations). The willingness to accepted decreases for shorter contracts and contracts option to cancel, which means a preference for flexiblity amongst farmers. Additionally, we find a positive correlation of preferences to participate in different contracts, and that willingness to accept decreases with experience in contracts implementation and specialization (crop farms, dairy farms). Other variables (information, socio-economis variables) have some, but no systematic effects that appear to be contract-dependent.







Table 1. Farmers’ WTA for participation in new agri-environmental contracts (in 100 EUR per ha per year)

Mean St. Dev.
Fertilization – length -0.3086***
Possible to cancel – Fertilization 0.8554***
Diversification – length -0.4708***
Possible to cancel – Diversification 0.5624***
Catch crops – length -0.3868***
Possible to cancel – Catch crops 0.9462***
Basic protection of peatlands – length -0.1220***
Extended protection of peatlands (premium) -1.3091***
Possible to cancel – peatlands protection 0.2922
Extensive meadow use – length -0.1931***
Possible to cancel – Extensive meadow use 0.3506**
Livestock reduction -0.4836***
Livestock reduction – length -0.2905***
Possible to cancel – Livestock reduction 0.9374***
Model diagnostics
LL at convergence -5,133.37
LL at constant(s) only -6,849.26
McFadden’s pseudo-R² 0.2505
Ben-Akiva-Lerman’s pseudo-R² 0.4680
AIC/n 1.6175
BIC/n 1.7611
n (observations) 6,518
r (respondents) 463
k (parameters) 138

Notes: ***, ** and * indicate 1%, 5% and 10% significance levels, respectively. Standard errors provided in parentheses. All WTA distributions were assumed normal and correlated. The detailed results, including estimated correlation coefficients and DCE-specific scale controls are available upon request from authors.