Incentivizing uptake of sustainable agricultural practices: the role of private financial and non-financial incentives

Globally, there is a growing pressure on the agri-food sector to attain food security and minimize the negative impacts of the sector on the climate and biodiversity. In response, farmers are adopting management practices and technologies that are more environmentally, economically and socially sustainable. Investments in sustainable agricultural practices, technologies and farm infrastructure have significant climatic, societal and economic implications. While these investments are often perceived as costly and potentially reducing the competitiveness of the agri-food sector, there is limited understanding of how the adoption of these practices influences both farm economic and non-economic outcomes. The uncertainty surrounding whether farmers have concrete private incentives – economic or otherwise – to transition towards more sustainable agricultural practices presents a challenge and slows adoption. Therefore, research in this area is essential to provide insights into the potential trade-offs or synergies between financial and non-financial goals, ultimately supporting informed decision-making in the agri-food sector.

My research mainly focuses on applying different econometric modeling techniques to synthesize evidence that supports the adoption of innovative and sustainable practices in both the livestock and crop sectors. In the livestock sector, my research has examined farmers’ decisions to adopt animal health and welfare-enhancing practices and their impacts on farm economic outcomes. In the crop sector, I have focused on the adoption and impacts of sustainable farming technologies, including greenhouse farming, urban agriculture, irrigation management transfer and selective harvesting and preventive site-specific spraying, across Europe, Asia and Africa. A key strength of my research work is the use of diverse econometric modelling techniques, enabling me to address a wide range of issues within the agri-food sector. I have established strong interdisciplinary collaborations, expanding my research across Asia, Africa and Europe.

In this docent lecture, I highlight key insights and contributions from my past and current research:

• Animal health and welfare (AHW) are central to sustainability due to their interconnectedness with key sustainability dimensions. Through continuous collaborations with experts in animal and environmental sciences, economics, policy, trade and behavioral sciences, I examine how AHW influence climatic, societal and economic outcomes.
• The common assumption that farmers’ decision-making is solely driven by profit-maximization should be revisited. Using Swedish dairy farmers’ adoption of AWH-enhancing practices as an example; I demonstrate that farmers’ choices are driven by both economic and non-economic values.
• Farmers’ decisions to adopt precision farming technologies involve trade-offs between changes in farming practices, economic and environmental changes. In collaboration with soil scientists, agronomists, farm advisors, and precision soil and crop engineers, we demonstrate that stated choice of precision farming technologies is better understood by distinguishing between economic and non-economic utility.
• Methodologically, my research contributes to the expansion of the choice modelling literature. First, I have incorporated farmer motivation as a latent variable within a standard choice framework, creating an integrated modelling framework that allows latent constructs to be included in the utility function. This approach enhances efficiency and reduces bias in estimation. Second, I have demonstrated that specific latent constructs from the Theory of Planned Behavior (TPB) and the Technology Acceptance Model (TAM) can be incorporated into choice modelling to account for heterogeneity in farmers’ preferences and choices for precision agricultural technologies.
• From a societal viewpoint, my research work contributes to achieving Sustainable Development Goals (SDGs) 1, 2, 3, 4, 7, 12 and 13.

My future research will focus on sustainable and resilient agrifood systems, exploring how different econometric tools can be used to analyze agrifood system transformation and its interrelationships with farm profitability, food security, environmental and social sustainability, and resilience in both developed and emerging economies.