Farmers’ Willingness to Produce Alternative Cellulosic Biofuel Feedstocks Under Contract in Kansas Using Stated Choice Experiments

Abstract

Many studies have assessed the technical feasibility of producing bioenergy crops on agricultural lands. However, while it is possible to produce large quantities of agricultural biomass for bioenergy from lignocellulosic feedstocks, very few of these studies have assessed farmers' willingness to produce these crops under different contracting arrangements. The purpose of this paper is to examine farmers' willingness to produce alternative cellulosic biofuel feedstocks under different contractual, market, and harvesting arrangements. This is accomplished by using enumerated field surveys in Kansas with stated choice experiments eliciting farmers' willingness to produce corn stover, sweet sorghum and switch grass under different contractual conditions. Using a random utility framework to model the farmers' decisions, the paper examines the contractual attributes that will most likely increase the likelihood of feedstock enterprise adoption. Results indicate that net returns above the next best alternative use of the land, contract length, cost-share, financial incentives, insurance, and custom harvest options are all important contract attributes. Farmers' willingness to adopt and their willingness-to-pay for alternative contract attributes vary by region and choice of feedstock.

Opportunities for Energy Crop Production Based on Subfield Scale Distribution of Profitability

“…Smith, Schulman, Current and Easter [26] concluded from a survey of landowners in southern Minnesota that 72% of growers were willing to produce perennial grasses if net profits exceeded current profit from row crops while 45% of growers were willing if net incomes were only equal. Bergtold, Fewell and Williams [9] also found that over 60% of surveyed farmers in Kansas were willing to produce annual energy crops and nearly 50% were willing to produce perennial crops if their production added value beyond the next best available practice. While both of these works identify economic competition on a field level annual net return, participant responses clearly indicate that growers perceive the adoption of energy crops on a subfield basis (i.e., preferentially targeting poorly drained or higher sloped soils where row crop performance is poor) [26].…”

“…Proactive solutions must be developed to address the economic and environmental constraints that limit the amount of agricultural residues (primarily corn (Zea mays L.) stover) currently available for energy use [4,7,8]. Incorporation of high yielding dedicated energy crops into agricultural lands to supplement the current supply of agricultural residues is a promising option, but one that must first overcome concerns of negatively impacting food and fiber supplies, practical limitations, and economic viability [9][10][11][12].…”

“…Additionally, the flexible harvest window and perennial nature of switchgrass results in positive benefits to soil health [17,18], water quality [19], and ecosystem services [20,21]. Despite these positive traits, adoption of switchgrass into agricultural lands has been limited due to a lack of mainstream acceptance as a bioenergy feedstock and uncertain risk of production [9,22,23]. Agricultural land management decisions are complex in nature, varied by site specific conditions, land tenure, policy, perception, and farm-scale economic constraints [24][25][26].…”

Summary Report on the 2012 Sun Grant National Conference: Science for Biomass Feedstock Production and Utilization

“…Topic Area 4: Despite the importance of social acceptance and societal issues, this topic area is inadequately represented. In this special issue, one article, Bergtold, et al [3] assesses farmers' willingness to produce bioenergy crops. Enumerated field surveys were given to farmers with stated choice experiments designed to elicit their willingness to produce corn stover, sorghum, and switchgrass under a variety of contractual arrangements.…”

“…Using a random utility framework, the authors examined the contractual components that increased farmer adoption. Bergtold et al [3] concludes that net returns, contract length, cost-share, financial incentives, insurance, and custom harvest options are all valuable attributes to farmers, and should be considered in the emerging biofuels industry.…”