Demographic influences on willingness to pay for cold tolerance technology.

Results of the analysis are shown in figure 8. The percent increase in SC that producers were willing to pay was just slightly higher for increased degrees of frost tolerance than it was for decreased days to maturity. Large, high-income farms were most willing to pay a seed price premium for cereal varieties that are more frost tolerant or mature more quickly. According to these results, large farms with frequent frost exposure were willing to absorb an increase in SC of about 45.8% for a variety combining the two improvements. Using an approximate current wheat SC of $9 per bushel and a seeding rate of 1.75 bushels per acre, this translates to a per acre SC increase from $15.75 to $22.96, an increase of $7.21 per acre. Younger farm operators and those in the more commonly affected Peace area were also slightly more willing to pay for FT than the average person. A summary of the willingness to pay can be found in table 3.

Conclusions

Results of the survey and analysis as well as discussions with producers during the administration of our survey indicate that there is strong interest among farm operators in trying new frost tolerant varieties. However, it will be important to focus advertising and distribution on areas in which producers must frequently deal with frost problems. Marketing efforts should also focus on large, high-income operations whenever possible, as most product introductions should. Interest in increased FT is slightly higher than that for decreased days to maturity, but the highest willingness to pay is achieved when synergies between the two traits are created. Geographical location and risk exposure are key elements in the variety adoption decision. The findings of this project should provide confidence to researchers investing time in the development of cold tolerant varieties, as they indicate a healthy interest in technologies to expand production possibilities for cereals in Western Canada.

We would like to thank Dr. Tomas Nilsson, Dr. Bodo Steiner, and Dr. Linda Hall for their assistance in designing and administering the questionnaire. The author also wishes to thank Jesse Cole, Brian Markert, and Melissa Reinhardt for work creating the survey and writing a related paper on the attitudinal results with the author. Financial support was provided by the University of Alberta Department of Rural Economy and by the "Crop Adaptation Genomics" research program, funded by Genome Prairie. Genome Alberta and Genome Canada.

References

Alberta Agriculture and Food. 2006. "Agriculture Statistics Factsheet." Agdex 853, Government of Alberta July.

Genome Prairie. 2006. GE3LS Summary of Research and Overall Project Background.

Hall, B.H., and C. Cummins. 2005. TSP Reference Manual. University of California, Berkeley.

Karshenas, M., and EL. Stoneman. 1993. "Rank, Stock, Order, and Epidemic Effects in the Diffusion of New Process Technologies: An Empirical Model." RAND Journal of Economics 24:503-28.

Koundouri, E, C. Nauges, and V. Tzouvelekas. 2006. "Technology Adoption under Production Uncertainty: Theory and Application to Irrigation Technology." American Journal of Agricultural Economics 88:657-70.

Saha, A., H.A. Love, and R. Schwart. 1994. "Adoption of Emerging Technologies under Output Uncertainty." American Journal of Agricultural Economics 76:836-46.

Statistics Canada. 2001. "Agriculture 2001 Census Data Tables." Government of Canada.

Paper by undergraduate student Becky McCorkle written with guidance from professors Ellen Goddard, Scott Jeffrey, Jim Unterschultz, Department of Rural Economy, University of Alberta. Table 1. Sample of Variety Dichotomous Choice Question

New Variety Existing Variety Increase in current production 10% --

costs (e.g. seed cost cost/acre) Increase in frost tolerance No change --

(degrees Celsius) Decrease in days to maturity 2 -- I would choose Note: Suppose you have the opportunity to adopt a new Wheat variety that has increased cold tolerance. You will be asked to make a decision to switch to this variety or keep growing the current variety on your farm based in changes in costs and frost risk factors. Assume all other factors such as yield will remain constant between the new variety and your current one. Table 2. Mixed Logit-Stated Choice Model Results Parameter Estimate Standard T p Value

Error Statistic SC Seed Cost -4.3347 0.6613 -6.5553 [0.000] ** FT Frost Tot. 0.3445 0.0528 6.5272 [0.000] ** DD Days Earl. 0.3216 0.0554 5.8016 [0.000] ** SQ Status Quo 0.4139 0.6287 0.6583 [0.510] SIZEA2 Acres 0.0001 0.0000 3.5776 [0.000] ** AGE2 Years -0.0633 0.0542 -1.1689 [0.242] EDUCATION2 -0.2124 0.0819 -2.5947 [0.009] ** INCOME2 0.2388 0.0670 3.5643 [0.000] ** REGION2 -0.1151 0.0640 -1.7973 [0.072] * HOWOFTEN2 -0.2162 0.0939 -2.3034 [0.021] ** Notes: 800 observations (Eight per respondent) Scaled r square 0.18. Single asterisk denotes significance at 10% level. Double asterisk denotes significance at 5% level. Table 3. Willingness to Pay for Improved Cold Tolerance by Demographic Groups Willingness to Pay Frost Decreased New Variety

Tolerance Days to

Maturity Standard respondent -0.1374 -0.1427 -0.0632 Frost often-standard

respondent -0.0377 -0.0429 0.0365 Frost often-large farm 0.3837 0.3784 0.4579 Frost often-young -0.0084 -0.0137 0.0658 Frost often-high income 0.0725 0.0672 0.1467 Frost often-peace Region 0.0154 0.0102 0.0896 Figure 5. Frost experience by survey respondents Experience of Quality or Yield Loss Due to Frost Have Experienced Frost Damage 88% Have Not Experienced Frost Damage 12% Note: Table made from pie chart.