How to reduce the carbon footprint of the agricultural sector? Factors influencing farmers' decision to participate in carbon sequestration programs.

Mitigating climate change by sequestering carbon in agricultural soils through humus formation is a crucial component of sustainable agriculture. Humus programs that are designed to incentivize farmers to build more humus are still recent innovations, so current knowledge about farmers' motivation to participate is limited. This study examines the adoption of non-governmental humus programs to promote carbon sequestration by analyzing farmers' willingness to participate in humus programs and influential factors. We specifically investigate behavioral factors underlying farmers' adoption of humus programs using the Theory of Planned Behavior. To this end, we collected data using an online survey with 190 German farmers and applied partial least squares structural equation modeling. The results show that (i) perceived economic benefits, (ii) the actions of fellow farmers, and (iii) farmers' sense of responsibility with regard to climate change have a statistically significant influence on farmers' intention to participate in a humus program. In contrast, the perceived ecological benefits, political pressure, the possibility of establishing humus-building measures, and prior knowledge of humus programs have no statistically significant influence. Our findings suggest that farmers' decision to participate in humus programs is strongly influenced by the financial benefits, but the actions and thoughts of other farmers, as well as their own moral claims regarding climate change, also play a crucial role. We found that farmers lack knowledge about the registration and general functioning of humus programs, which can currently be one of the biggest barriers to participation in such initiatives.

Strengthening oil palm smallholder farmers' resilience to future industrial challenges.

Oil palm cultivation has improved living standards and alleviated the poverty of many smallholder farmers. However, challenges such as climate change, aging palms and negative sentiments in the major markets, threaten the wellbeing of and raise the question on smallholder farmers' resilience, which remains poorly understood. Using primary data from Indonesia, the largest palm oil producer in the world, we measure and evaluate the resilience of oil palm smallholder farmers using the Sustainable Livelihoods Approach. Our results revealed five classes of smallholders with different levels of resilience: vulnerable, economically and socially constrained, low-skilled, semi-secure and adaptive smallholders. The farmers in the least resilient group are majorly older local farmers, who established oil palm plantations independently. Meanwhile, the most resilient group is dominated by smallholders who participated in the migration program, and in the past, received support from the government to start oil palm plantations. Our study highlights the heterogeneity of smallholders' livelihood resilience and the need for inclusive and tailored interventions for the various classes of smallholder farmers to establish sustainable communities.

Balancing economic and ecological functions in smallholder and industrial oil palm plantations.

The expansion of the oil palm industry in Indonesia has improved livelihoods in rural communities, but comes at the cost of biodiversity and ecosystem degradation. Here, we investigated ways to balance ecological and economic outcomes of oil palm cultivation. We compared a wide range of production systems, including smallholder plantations, industrialized company estates, estates with improved agronomic management, and estates with native tree enrichment. Across all management types, we assessed multiple indicators of biodiversity, ecosystem functions, management, and landscape structure to identify factors that facilitate economic-ecological win-wins, using palm yields as measure of economic performance. Although, we found that yields in industrialized estates were, on average, twice as high as those in smallholder plantations, ecological indicators displayed substantial variability across systems, regardless of yield variations, highlighting potential for economic-ecological win-wins. Reducing management intensity (e.g., mechanical weeding instead of herbicide application) did not lower yields but improved ecological outcomes at moderate costs, making it a potential measure for balancing economic and ecological demands. Additionally, maintaining forest cover in the landscape generally enhanced local biodiversity and ecosystem functioning within plantations. Enriching plantations with native trees is also a promising strategy to increase ecological value without reducing productivity. Overall, we recommend closing yield gaps in smallholder cultivation through careful intensification, whereas conventional plantations could reduce management intensity without sacrificing yield. Our study highlights various pathways to reconcile the economics and ecology of palm oil production and identifies management practices for a more sustainable future of oil palm cultivation.

Farmers' Willingness to Participate in a Carbon Sequestration Program - A Discrete Choice Experiment.

Farmers can counteract global warming by drawing carbon dioxide from the air into agricultural soils by building up humus. Humus programs were developed to motivate farmers for even more humus formation (= carbon sequestration) through an additional financial incentive. These programs are still at an early stage of development, which is why the number of participating farmers and research work is still low. This study is the first to analyze the willingness of German farmers to participate in hypothetical humus programs. The results of a discrete choice experiment show that a (higher) threshold for the payout of the premium, regional (rather than field-specific) reference values, and the risk of repayment clearly discourage farmers from participating. Program providers must more than double the premium (set at around 240 € per hectare and 0.1% humus increase) to maintain farmers' willingness to participate despite a payout threshold. Regional reference values and an additional premium/repayment system would lead to an increase in the premium of around 20 € per hectare in order to keep the willingness to participate at the same level. The motivation to build up humus, the desire to maximize subsidies, and a higher livestock density have a positive influence on farmers' decision to participate. Farm size and risk attitude have an impact on farmers' preferences for program design. The study is relevant for policymakers and non-governmental organizations concerned with carbon management, as our findings highlight pathways for efficient, targeted designs of humus programs and carbon sequestration policies.

Does the COVID-19 pandemic lockdown affect risk attitudes?-Evidence from rural Thailand.

Empirical research provides evidence on changes in individuals' risk attitudes after experiencing exogenous shocks. The global outbreak of the COVID-19 pandemic has had various adverse impacts on economies and households. This study utilizes the COVID-19 pandemic and the accompanying lockdown to explore its impact on risk attitudes in rural Thailand using a difference-in-difference (DiD) approach. Overall, we do not find evidence on considerable changes in the willingness to take risks of rural household members after experiencing a lockdown during the pandemic. However, a significant heterogenous effect is found between individuals working inside and outside the agricultural sector. Individuals working outside the agricultural sector have a statistically significant reduction in their willingness to take risks after experiencing a lockdown. Our study provides additional empirical evidence to understand the impact of shocks on rural households' risk attitudes. This sheds light on how policy designs can better help mitigate downward economic trends following exogenous shocks.

Understanding German farmers' intention to adopt drought insurance.

Climate risks, particularly droughts and heat waves, negatively affect agricultural incomes worldwide. Drought insurance is promising to mitigate resulting income losses at the farm level. As the proportion of German farmers insured against drought is low, policymakers and insurers aim to increase the appeal of drought insurance to farmers. However, to accelerate their efforts in this regard, more information regarding farmers' intention to adopt drought insurance beyond current adoption is needed. To obtain initial insights, we surveyed 127 German farmers in a risk management context and applied a modified transtheoretical model of behavioral change. This revealed detailed information on the gradual adoption of drought insurance. Given a heterogenous distribution among the gradual stages of adoption, a binomial logit model was estimated instead of an ordered logit to investigate farmers' current intention to adopt drought insurance. Furthermore, the machine learning technique of least absolute shrinkage and selection operator (LASSO) was applied to select the most relevant features to be used as explanatory variables in the estimation. The results show that farmers' gender and risk attitude, land tenure, how severely they were affected previously by weather risks, and the level of trust in index insurance products have a statistically significant effect on farmers' intention to adopt drought insurance. Additionally, this study provides insights into farmers' reasons against drought insurance. As such, the results are important to policymakers considering policy intervention, insurers interested in farmers' intention to insure and to researchers focusing on farmers' adaptation to climate change.

A tobit regression model for the timing of smartphone adoption in agriculture.

Smartphones are excellent tools well-suited for applications in agriculture because of their mobility, high data processing power, access to agricultural apps, and compatibility with precision agriculture technologies. Although smartphone adoption and the use of agricultural apps are well-studied, variables influencing the timing of smartphone adoption in agriculture have not yet been closely examined. Comprehending both the timing of when a certain technology is adopted and identifying the specific characteristics of early and late adopters aids in the anticipation and thereby the fostering of the diffusion process. This study's objective is therefore to analyse the timing of smartphone adoption for agricultural purposes by applying a tobit regression model to a data set of 207 German farmers, which was collected in 2019. The results indicate that significant factors influencing the timing of smartphone adoption in agriculture include farmers' gender, risk attitude, age, size and location of their farm, among other factors. These results may be interesting to several stakeholders in agriculture such as extension services, policymakers and researchers as well as smartphone providers and sellers.

The effect of poor vision on economic farm performance: Evidence from rural Cambodia.

Roughly one-fifth of the global population is affected by poor visual acuity. Despite the fact that inhabitants of rural areas in low-income countries are most distressed by this, no prior research has studied the impact of poor visual acuity on the economic performance of farms. We conduct a standardized eye test with 288 farm managers in rural Cambodia and find that around 30 percent of our sample suffers from poor visual acuity in terms of nearsightedness (myopia). Our analyses indicate a statistically significant and economically meaningful association of poor visual acuity with economic farm performance. Our results show that gross margins for cropping activities per year could be, on average, around 630 USD higher if farm managers were able to correct for poor vision. Our results suggest that poor visual acuity impairs farm managers from tapping the full potential of their business, which in turn decreases their chance to break the vicious cycle of poverty.

Farmers' willingness to pay for digital and conventional credit: Insight from a discrete choice experiment in Madagascar.

In recent decades, microfinance institutions with financial products designed for low income groups have been established all over the world. However, credit access for farmers in developing countries remains low. Digital financial services are rapidly expanding globally at the moment. They also bear great potential to address the credit needs of farmers in remote rural areas. Beyond mobile money services, digital credit is successively offered and also discussed in literature. Compared to conventional credit which is granted based on a thorough assessment of the loan applicant's financial situation, digital credit is granted based on an automated analysis of the existing data of the loan applicant. Despite the potential of digital credit for serving the credit needs of rural farmers, empirical research on farmers' willingness to pay for digital credit is non-existent. We employ a discrete choice experiment to compare farmers' willingness to pay for digital and conventional credit. We apply loan attributes which reflect typical characteristics of both credit products. Our results indicate a higher willingness to pay for digital credit compared to conventional credit. Furthermore, we find that the proximity to withdraw borrowed money has a higher effect on farmers' willingness to pay for digital credit compared to conventional credit. Furthermore, our results show that instalment repayment condition reduces farmers' willingness to pay for digital credit whilst increasing their willingness to pay for conventional credit. Additionally, we find that longer loan duration has a higher effect on farmers' willingness to pay for digital credit compared to conventional credit whereas higher additional credit cost has a lower effect on farmers' willingness to pay for conventional credit compared to digital credit. Our results highlight the potential of digital credit for agricultural finance in rural areas of Madagascar if a certain level of innovation is applied in designing digital credit products.

Promises and pitfalls of digital credit: Empirical evidence from Kenya.

Digital credit is a recent innovation that raises hopes of improving credit access in developing countries. However, up until now, empirical research on the extent to which digital credit actually reaches people who are otherwise excluded from conventional credit markets and whether increased credit access is sustainable or threatened by high default and blacklisting rates is very scarce. Using representative data from Kenya, this article shows that digital credit increases borrowing opportunities, including for people less likely to otherwise have credit access in the conventional credit markets. However, we find that digital credit borrowing is also responsible for 90% of all blacklistings, which is partially driven by higher default rates in the digital credit market but also by a higher probability that digital credit defaults lead to blacklisting of the borrower, compared to defaults in other credit markets.

Look at that!-The effect pictures have on consumer preferences for in ovo gender determination as an alternative to culling male chicks.

Gender determination in incubated eggs (in ovo) has the potential to substitute the highly discussed practice of culling male layer chicks. The aim of this study was to investigate the effect pictures have on peoples' preferences toward in ovo sexing at different stages of embryonic development and chick culling. For this purpose, an online survey was conducted with a representative sample of 482 respondents in Germany. A within-subject design with 2 choice experiments was used to investigate the influence pictures have on respondents' preferences and willingness to pay. The first-choice experiment contained plain text only; the second contained also pictures of a chick or the incubated eggs at the corresponding stages of development. Findings reveal that in ovo gender determination at each proposed day of incubation (d1, d4, and d9) was preferred to chick culling. In ovo screening on d1 and d4 was significantly preferred to d9. This preference for early gender determination increased significantly as a consequence to the provision of pictures. Results furthermore reveal that a high error rate of gender determination or the lack of a meaningful utilization of incubated eggs can decrease approval for in ovo gender determination to an extent, where no positive willingness to pay remains. Findings of this study are useful for stakeholders in poultry production when considering the implementation of in ovo gender determination as a morally admissible substitute to chick culling.

Trade-offs between multifunctionality and profit in tropical smallholder landscapes.

Land-use transitions can enhance the livelihoods of smallholder farmers but potential economic-ecological trade-offs remain poorly understood. Here, we present an interdisciplinary study of the environmental, social and economic consequences of land-use transitions in a tropical smallholder landscape on Sumatra, Indonesia. We find widespread biodiversity-profit trade-offs resulting from land-use transitions from forest and agroforestry systems to rubber and oil palm monocultures, for 26,894 aboveground and belowground species and whole-ecosystem multidiversity. Despite variation between ecosystem functions, profit gains come at the expense of ecosystem multifunctionality, indicating far-reaching ecosystem deterioration. We identify landscape compositions that can mitigate trade-offs under optimal land-use allocation but also show that intensive monocultures always lead to higher profits. These findings suggest that, to reduce losses in biodiversity and ecosystem functioning, changes in economic incentive structures through well-designed policies are urgently needed.

Understanding the adoption of smartphone apps in dairy herd management.

The number of decision support tools available to farmers, including dairy herd management smartphone apps, has been steadily increasing. The existing literature does not cover topics concerning the adoption and use of herd management smartphone apps or which specific functions of such apps are perceived as most useful by dairy farmers. It is unclear whether technology adoption can only be explained by economic reasoning, because the beliefs about a technology also play a role in decision-making. Therefore, this study seeks to determine whether an extended technology acceptance model can explain adoption and use of herd management smartphone apps. Results about the adoption and use of dairy herd management smartphone apps are derived from an online survey conducted in 2018 with 280 German dairy farmers. To model farmers' frequency of use of herd management smartphone apps, we applied partial least squares structural equation modeling and an ordered logit model. Our results show that 93% of the dairy farmers in our sample use a smartphone and 61% already use a herd management smartphone app. Daily use is reported by 38% of the adopters. Dairy farmers rated functions related to the observation of animal health, reproduction management, and data gathering as most useful, which should be in focus by developers and providers for future development. The key attitudinal components of the technology acceptance model, namely perceived ease of use and perceived usefulness, both positively influence the intention to use such apps. This ultimately has a positive effect on the actual usage behavior. Besides other factors, dairy farmers' education and knowledge of herd management smartphone apps have a positive effect on perceived ease of use. Our model explains 33% of the variance in the actual usage behavior related to herd management smartphone apps. Because perceived ease of use and perceived usefulness positively influence the intention to use such apps and ultimately the actual usage behavior, developers and providers should highlight the benefits of using herd management smartphone apps and also keep the interface of the apps as simple as possible.

Consumer preferences for alternatives to chick culling in Germany.

The use of highly specialized breeds in poultry production has led to the situation in which fattening layer-type males are not economically viable, when competing with the conventional broiler meat. The vast majority of male layer chicks are therefore culled soon after hatching. Ethical concerns about this practice have led to a public debate in a number of countries, and its tenor seems unambiguous: the practice should end. Political and industrial representatives have also promoted putting an end to chick culling. Two alternatives that are already available or soon to be in the market in a number of countries are dual-use poultry production and in ovo gender determination. However, the alternatives are also not free from controversy. The presented study analyzes consumer attitudes towards these 2 alternatives. A discrete choice experiment on eggs with different production attributes was conducted among a sample of 400 German citizens. Results from a latent class model show that there is considerable heterogeneity in preferences, which can be depicted in 5 consumer segments. Consumer segments differ significantly in socioeconomic characteristics and attitudes towards chick-culling alternatives. One segment decides mainly based on product price. However, 28% of the sample show no price sensitivity but choose based on other product attributes such as the preferred chick-culling alternative or egg type. We find wide approval for in ovo gender determination with no segment disapproving of the technology. When it comes to dual-use poultry, the type of husbandry of cockerels is crucial for the approval of this production scheme. Rearing male chicks in free-range husbandry is the preferred alternative for one segment representing 27% of the sample. Results provide empirical evidence for a diversified egg demand, indicating diverse expectations for poultry production in the future.

Data on risk preferences and risk literacy for a sample of German agricultural sciences students.

The data presented here contains information on risk preferences, risk literacy and personal characteristics collected from 244 German agricultural sciences students in an online survey in 2015. Two different risk preference elicitation methods have been used. First, we used an iterative multiple price list (iMPL). Second, a simple self-assessment of risk preferences was used. Moreover, we used two different frames of the iMPL (general and context specific). Inconsistent behavior within the iMPL has been documented. Finally, the dataset includes information on the participants' risk literacy (using the Berlin Numeracy test), gender, optimism, involvement with agriculture age and mothers' education. The data is related to the paper: Meraner M, Musshoff O, Finger R. Using involvement to reduce inconsistencies in risk preference elicitation. Journal of Behavioral and Experimental Economics. 2018 73:22-33.

Phenology Information Contributes to Reduce Temporal Basis Risk in Agricultural Weather Index Insurance.

Weather risks are an essential and increasingly important driver of agricultural income volatility. Agricultural insurances contribute to support farmers to cope with these risks. Among these insurances, weather index insurances (WII) are an innovative tool to cope with climatic risks in agriculture. Using WII, farmers receive an indemnification not based on actual yield reductions but are compensated based on a measured weather index, such as rainfall at a nearby weather station. The discrepancy between experienced losses and actual indemnification, basis risk, is a key challenge. In particular, specifications of WII used so far do not capture critical plant growth phases adequately. Here, we contribute to reduce basis risk by proposing novel procedures how occurrence dates and shifts of growth phases over time and space can be considered and test for their risk reducing potential. Our empirical example addresses drought risks in the critical growth phase around the anthesis stage in winter wheat production in Germany. We find spatially explicit, public and open databases of phenology reports to contribute to reduce basis risk and thus improve the attractiveness of WII. In contrast, we find growth stage modelling based on growing degree days (thermal time) not to result in significant improvements.

The former Iron Curtain still drives biodiversity-profit trade-offs in German agriculture.

Agricultural intensification drives biodiversity loss and shapes farmers' profit, but the role of legacy effects and detailed quantification of ecological-economic trade-offs are largely unknown. In Europe during the 1950s, the Eastern communist bloc switched to large-scale farming by forced collectivization of small farms, while the West kept small-scale private farming. Here we show that large-scale agriculture in East Germany reduced biodiversity, which has been maintained in West Germany due to >70% longer field edges than those in the East. In contrast, profit per farmland area in the East was 50% higher than that in the West, despite similar yield levels. In both regions, switching from conventional to organic farming increased biodiversity and halved yield levels, but doubled farmers' profits. In conclusion, European Union policy should acknowledge the surprisingly high biodiversity benefits of small-scale agriculture, which are on a par with conversion to organic agriculture.

Land-use choices follow profitability at the expense of ecological functions in Indonesian smallholder landscapes.

Smallholder-dominated agricultural mosaic landscapes are highlighted as model production systems that deliver both economic and ecological goods in tropical agricultural landscapes, but trade-offs underlying current land-use dynamics are poorly known. Here, using the most comprehensive quantification of land-use change and associated bundles of ecosystem functions, services and economic benefits to date, we show that Indonesian smallholders predominantly choose farm portfolios with high economic productivity but low ecological value. The more profitable oil palm and rubber monocultures replace forests and agroforests critical for maintaining above- and below-ground ecological functions and the diversity of most taxa. Between the monocultures, the higher economic performance of oil palm over rubber comes with the reliance on fertilizer inputs and with increased nutrient leaching losses. Strategies to achieve an ecological-economic balance and a sustainable management of tropical smallholder landscapes must be prioritized to avoid further environmental degradation.