Grazing Practice Choices, Capital Constraints, and the Environment

Yuyuan Che, Hongli Feng and David A. Hennessy

No 342491, 2021 Annual Meeting, August 1-3, Austin, Texas from Agricultural and Applied Economics Association

Abstract: There is a large literature on “adoption gap” which describes the slower adoption of an apparent win-win technology for profit and the environment. The extent and reasons for such adoption gaps differ across technologies. We examine this adoption gap in the context of rotational grazing. Rotational grazing has the potential to provide both economic and environmental benefits. However, there remains a gap between the set of ranchers that could potentially adopt rotational grazing and the set that actually adopts. To investigate this gap, we use survey data from 874 ranchers on the Great Plains to learn about adoption decisions and motivations. In contradiction to basic economic reasoning, we find that over half (57%) of surveyed ranchers who view rotational grazing as win-win for both profit and the environment do not adopt it. We also find that win-win non-adopters are a very constrained group for most potential challenges to rotational grazing adoption, especially high initial costs, water resource limitations, and ranch conditions. Some of these challenges could be relieved by capital; however, win-win non-adopters have limited borrowing capacity and constrained access to operating capital. They are more willing to adopt rotational grazing than others when a one-time hypothetical subsidy is offered. These findings suggest that win-win non-adopters are an effective target group for investment subsidies to promote the adoption of rotational grazing practices. Consistent with the literature, our analysis shows the importance of understanding the specifics of the adoption gap for effective policymaking.

Keywords: Agricultural and Food Policy; Crop Production/Industries; Environmental Economics and Policy (search for similar items in EconPapers)
Pages: 47
Date: 2021-08-01
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea21:342491

DOI: 10.22004/ag.econ.342491

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