Farmers’ Valuation of Incentives to Produce GMO-free Milk: A Discrete Choice Experiment

Abstract

This paper investigates farmers’ willingness to adopt a Genetically Modified Organisms (GMO)-free milk production scheme introduced by the dairy. Incentives like a price premium, advice, quality control and feed procurement are set to encourage the conversion. The analysis is based upon Discrete Choice Experiments with 151 dairy farmers in Germany. Alternative-specific conditional logit estimation reveals the marginal effects of incentives and the amount of compensation. The results indicate that attributes like the price premium, takeover of feed procurement and an external audit affect the likelihood of adoption. Farmer, farm characteristics and attitudes concerning GMO as well as expectations on feed prices were found to be significant determinants of adoption. Moreover the findings demonstrate variation in the values of attributes across regions.