Producer Preferences for Contracts on a Risky Bioenergy Crop

Krah, Kwabena; Petrolia, Daniel R.; Williams, Angelica; Coble, Keith H.; Harri, Ardian; Rejesus, Roderick M.

doi:10.1093/aepp/ppx034

Cited by 13 publications

(7 citation statements)

References 41 publications

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“…This result is distinct from, but nonetheless consistent with, previous research that found Danish farmers value flexibility in contract terms of an agri-environmental policy to promote adoption of pesticide-free buffer zones (Christensen et al 2011). Krah et al (2017) found a similar dislike of multi-year contracts in the context of contracting to grow a bioenergy crop.…”

Section: Resultssupporting

confidence: 80%

Farmer Preferences for Agricultural Soil Carbon Sequestration Schemes

Gramig

Widmar

2017

Applied Eco Perspectives Pol

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The sizable technical potential to sequester atmospheric carbon in soils to mitigate climate change will only be realized where and when there is also economic potential. A choice experiment conducted with a random sample of farmers in the State of Indiana, United States, revealed that farmers who have not previously adopted reduced tillage practices on any of their land require a $40 per acre increase in net revenue to switch from conventional tillage to no-till. We estimate that farmers have a $10.57/acre option value of not signing a multi-year sequestration contract, and find that government payments are preferred to carbon markets.

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Section: Resultssupporting

confidence: 80%

Farmer Preferences for Agricultural Soil Carbon Sequestration Schemes

Gramig

Widmar

2017

Applied Eco Perspectives Pol

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“…MacDonald 2006; Sexton 2012; Wu 2014) and ( b ) the role of contracting in the provision of energy crops for biofuels (e.g. Alexander et al 2012; Yang, Paulson, and Khanna 2016; Khanna, Louviere, and Yang 2017; Krah et al 2018). In this article, we are instead concerned with the influences of contracting prevalence on price transmission.…”

Section: Theoretical Explorationmentioning

confidence: 99%

Oil Price Pass through to Agricultural Commodities^†

Lundberg¹,

Skolrud²,

Adrangi³

et al. 2020

American J Agri Economics

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Energy represents an important share of production costs for many agricultural commodities. Previous studies have found mixed evidence of a pass‐through relationship between oil prices and agricultural commodity prices, a relationship that has the potential to disrupt farm‐level decision making. We propose that these mixed findings are in part due to heterogeneity in the pass‐through relationship across time horizons. We use a new wavelet‐based regression approach to explore horizon‐based heterogeneity in the relationship between oil and agricultural commodity prices. We find strong evidence of heterogeneity across time horizons and commodities. We develop a stylized model of agricultural production and show that agricultural contracts can generate price stickiness that leads to heterogeneity in input price pass through over different horizons. We also find evidence that recent technological shifts have led to a structural change in this horizon‐based heterogeneity.

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“…In contrast, Fewell, Bergtold, and Williams () and Krah et al. () found that the risk attitude had no significant effect on the cultivation of switchgrass and miscanthus. Albeit at a relatively low significance level, the covariate farm size shows a negative part‐worth parameter for SRC.…”

Section: Discussionmentioning

confidence: 91%

“…() and Krah et al. () have already illustrated the importance of purchase contracts with respect to the production of energy crops.…”

Section: Discussionmentioning

confidence: 99%

“…Therefore, networks involving farmers and the interested processing industry should be initiated or promoted once a largescale material use of lignocellulose seems to be useful and feasible. Analyses by Fewell et al (2016), Khanna et al (2017) and Krah et al (2015) have already illustrated the importance of purchase contracts with respect to the production of energy crops.…”

Section: Discussionmentioning

confidence: 99%

See 1 more Smart Citation

Combining choice modeling estimates and stochastic simulations to assess the potential of new crops—The case of lignocellulosic perennials in Southwestern Germany

et al. 2018

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In the future, the lignocellulosic perennial crops short rotation coppice (SRC) and miscanthus are supposed to provide renewable raw materials for a bio‐based economy. To assess the potential regional supply of these crops, which are not yet widespread in Baden–Wuerttemberg (Southwest Germany), we used a two‐step approach. In a first step, we conducted a Discrete Choice Experiment (DCE) in regions of Baden–Wuerttemberg that—given their site conditions—are suitable for SRC or miscanthus. The respondents were characterized by significant preference heterogeneity for both (negatively valued) perennial crops and for all presented choice attributes. Thus, it was appropriate to estimate a random parameter logit model (RPL). The attributes average yearly contribution margin, long‐term purchase guarantee and cultivation by colleagues in the neighborhood had a significantly positive effect on the likelihood of cultivation, whereas the attributes contribution margin variability and initial investment need showed a significantly negative effect. In a second step, assuming realistic values for the levels of the attributes considered in the DCE, in stochastic simulations, we randomly draw part‐worth utilities from the multivariate normal distribution of these parameters according to the RPL results. This way, for alternative biomass prices, we derived shares of farmers’ willing to engage in perennial crop production and produced related regional supply functions. Under moderate yield and realistic input and farmland opportunity cost assumptions, the full regional miscanthus potential can only be achieved when farmers are offered either subsidies or price‐risk‐reducing long‐term contracts. Based on empirically determined heterogeneous farmer preferences, our two‐step approach is suitable to yield realistic estimations of any not yet implemented farming practices. We finally note caveats related to our analysis and discuss some policy implications of the major findings.

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Producer Preferences for Contracts on a Risky Bioenergy Crop

Cited by 13 publications

References 41 publications

Farmer Preferences for Agricultural Soil Carbon Sequestration Schemes

Farmer Preferences for Agricultural Soil Carbon Sequestration Schemes

Oil Price Pass through to Agricultural Commodities^†

Combining choice modeling estimates and stochastic simulations to assess the potential of new crops—The case of lignocellulosic perennials in Southwestern Germany

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Producer Preferences for Contracts on a Risky Bioenergy Crop

Cited by 13 publications

References 41 publications

Farmer Preferences for Agricultural Soil Carbon Sequestration Schemes

Farmer Preferences for Agricultural Soil Carbon Sequestration Schemes

Oil Price Pass through to Agricultural Commodities†

Combining choice modeling estimates and stochastic simulations to assess the potential of new crops—The case of lignocellulosic perennials in Southwestern Germany

Contact Info

Product

Resources

About

Oil Price Pass through to Agricultural Commodities^†