Evaluating farmers’ likely participation in a payment programme for water quality protection in the UK uplands

Maintaining drinking water quality is essential to water companies and their customers, and agricultural non-point source pollution is a major cause of water quality degradation. In this paper, we examine the potential use of payments financed by a water company as incentives for farmers to adjust their agricultural land management practices in order to protect water quality. We use a choice experiment (CE) to measure farmers’ minimum willingness to accept (WTA) requirements to adjust agricultural land management practices in Nidderdale and the Washburn valley (Yorkshire, UK) under a potential local payment for ecosystem services (PES) programme. Latent class analysis of farmers’ CE responses was used to quantify the size and spread of farmers’ preferences and minimum WTA values for compensation payments, and to investigate potential drivers of preference variation. Analysis suggested that the emphasis on sheep or cattle/dairy production within mixed farming businesses in this area provides a partial explanation for the considerable observed heterogeneity in preferences and minimum WTA requirements for participation in a potential PES programme.

[1]  R. Cattell.  The Scree Test For The Number Of Factors. , 1966, Multivariate behavioral research.

[2]  R. Scarpa,et al.  Destination Choice Models for Rock Climbing in the Northeastern Alps: A Latent-Class Approach Based on Intensity of Preferences , 2005, Land Economics.

[3]  D. Hensher,et al.  Stated Choice Methods: Analysis and Applications , 2000 .

[4]  Matthias M. Boer,et al.  PAN-EUROPEAN SOIL EROSION RISK ASSESSMENT: , 2004 .

[5]  Christophe Béné,et al.  Storage and Viability of a Fishery with Resource and Market Dephased Seasonalities , 2000 .

[6]  E. Morey.  The demand for site-specific recreational activities: A characteristics approach , 1981 .

[7]  K. McConnell,et al.  Valuing Environmental and Natural Resources , 2002 .

[8]  Paul Kay,et al.  The use of GIS and multi-criteria evaluation (MCE) to identify agricultural land management practices which cause surface water pollution in drinking water supply catchments. , 2008, Water science and technology : a journal of the International Association on Water Pollution Research.

[9]  J. Bennett,et al.  The choice modelling approach to environmental valuation , 2001 .

[10]  P. Boxall,et al.  Understanding Heterogeneous Preferences in Random Utility Models: A Latent Class Approach , 2002 .

[11]  R. Cullen,et al.  Estimating the value of agricultural ecosystem services: a case study of New Zealand pastoral farming , 2009 .

[12]  John M. Antle,et al.  Spatial heterogeneity, contract design, and the efficiency of carbon sequestration policies for agriculture , 2003 .

[13]  Dan Rigby,et al.  Estimating the Range of Impacts Arising from Nitrate Leaching Reduction Policies Using Farm Accounts , 2007 .

[14]  Eric Ruto,et al.  What Do Farmers Want From Agri‐Environmental Scheme Design? A Choice Experiment Approach , 2010 .

[15]  Jordan J. Louviere,et al.  Introduction to Attribute-Based Stated Choice Methods , 1998 .

[16]  Pierre Dupraz,et al.  Agri-environment contract adoption under fixed and variable compliance costs , 2009 .

[17]  Montanarella Luca,et al.  Pan-European Soil Erosion Risk Assessment: The PESEA Map verson 1, October 2003 , 2004 .

[18]  I. Hodge,et al.  The introduction of Entry Level Stewardship in England: Extension or dilution in agri-environment policy? , 2010 .

[19]  Mark D. Uncles,et al.  Discrete Choice Analysis: Theory and Application to Travel Demand , 1987 .

[20]  M. T. Ahmed.  Millennium ecosystem assessment , 2002, Environmental science and pollution research international.

[21]  I. Krinsky,et al.  On Approximating the Statistical Properties of Elasticities , 1986 .

[22]  A. Bowman,et al.  Applied smoothing techniques for data analysis : the kernel approach with S-plus illustrations , 1999 .

[23]  William Revelle,et al.  An overview of the psych package , 2009 .

[24]  Payments for Ecosystem Services Programs: Predicting Landowner Enrollment and Opportunity Cost Using a Beta-Binomial Model , 2009 .

[25]  Andrea Cattaneo,et al.  Cost-effective design of agri-environmental payment programs: U.S. experience in theory and practice , 2008 .

[26]  D. McFadden.  Conditional logit analysis of qualitative choice behavior , 1972 .

[27]  D. Kay,et al.  Analysing the Agricultural Costs and Non‐market Benefits of Implementing the Water Framework Directive , 2006 .

[28]  Katharine R. E. Sims,et al.  Designing payments for ecosystem services: Lessons from previous experience with incentive-based mechanisms , 2008, Proceedings of the National Academy of Sciences.

[29]  Payment for Environmental Services: Estimating Demand Within a Tropical Watershed , 2009 .

[30]  Bettina Matzdorf,et al.  How cost-effective are result-oriented agri-environmental measures? - An empirical analysis in Germany. , 2010 .

[31]  Edward R. Morey,et al.  Investigating Preference Heterogeneity in a Repeated Discrete-Choice Recreation Demand Model of Atlantic Salmon Fishing , 2000, Marine Resource Economics.

[32]  J. Louviere,et al.  Final Report Introduction to Attribute-Based Stated Choice Methods , 1998 .

[33]  G. Garrod,et al.  Investigating farmers' preferences for the design of agri-environment schemes: a choice experiment approach , 2008 .

[34]  J. Holden,et al.  Drain blocking: an effective treatment for reducing dissolved organic carbon loss and water discolouration in a drained peatland. , 2006, The Science of the total environment.

[35]  Brian E. Roe,et al.  Optimal design of pro-conservation incentives , 2009 .

[36]  W. Greene,et al.  计量经济分析 = Econometric analysis , 2009 .

[37]  Katarina Elofsson,et al.  Cost-Effective Nutrient Reductions to the Baltic Sea , 1997 .

[38]  J. Swait.  A structural equation model of latent segmentation and product choice for cross-sectional revealed preference choice data☆ , 1994 .

[39]  Rick L. Andrews,et al.  Hierarchical Bayes versus Finite Mixture Conjoint Analysis Models: A Comparison of Fit, Prediction, and Partworth Recovery , 2002 .

[40]  M. Wedel,et al.  Market Segmentation: Conceptual and Methodological Foundations , 1997 .

[41]  K. Lancaster.  A New Approach to Consumer Theory , 1966, Journal of Political Economy.

[42]  G. Van Huylenbroeck,et al.  Measuring private transaction costs of European agri-environmental schemes , 2009 .

[43]  D. McFadden,et al.  Specification tests for the multinomial logit model , 1984 .

[44]  J. Heckman,et al.  Econometric duration analysis , 1984 .

[45]  Joan L. Walker.  Extended discrete choice models : integrated framework, flexible error structures, and latent variables , 2001 .

[46]  Anders Branth Pedersen,et al.  Determinants of farmers’ willingness to participate in subsidy schemes for pesticide-free buffer zones—A choice experiment study , 2011 .

[47]  P. Naden,et al.  Long term variation in water colour from Yorkshire catchments. , 2001, The Science of the total environment.

[48]  Maja Schlüter,et al.  Managing water-use trade-offs in a semi-arid river delta to sustain multiple ecosystem services: a modeling approach , 2009, Ecological Research.

[49]  J. Horn,et al.  Cattell's Scree Test In Relation To Bartlett's Chi-Square Test And Other Observations On The Number Of Factors Problem. , 1979, Multivariate behavioral research.

[50]  R. Costanza,et al.  Defining and classifying ecosystem services for decision making , 2009 .

[51]  R. D. Groot,et al.  A typology for the classification, description and valuation of ecosystem functions, goods and services , 2002 .