Dairy farmers' preferences for biogas plants: Evidence from a discrete choice experiment

Since the emissions of greenhouse gas (GHG) such as carbon dioxide, methane and dinitrogen monoxide are driving global warming, it is important to reduce GHG emissions from livestock sector. One approach to reduce GHG emissions from animal production systems is the use of biogas plants in which animal wastes can be utilized for methane fermentation. However, it is considered difficult to build a biogas plant that requires a large-scale capital investment. In order for farmers to introduce and operate biogas plants practically, appropriate subsidies from national and regional administrations should be required, and for that, quantification of financial burden of farmers on the introduction of biogas plants should be needed. Therefore, the objective of this study was to quantify how the dairy farmers in Hokkaido have the willingness to pay (WTP) on the introduction and maintaining biogas plants, by an econometric method called “discrete choice experiment (DCE)”. A questionnaire survey was conducted at 38 dairy farmers in Hokkaido from October to November 2017. For evaluating farmers' preference and WTP on biogas plants that is the target of the DCE, four attributes were set as follows: "power generation", "GHG reduction", "other pollution reduction", and "costs". For the statistical analysis, we used the following two models to estimate farmers' preference and WTP: conditional logit and mixed logit models. As results, by the both models, the preference for "power generation" was in the highest rank, as well as in WTP. Although not as much as for "power generation", there were also significant preferences for "GHG reduction" and "other pollution reduction". Therefore, the present study could reveal that dairy farmers have also potentially valued the GHG reduction effect on introducing biogas plants. Using the mixed logit model, the estimating yearly WTP for introducing biogas plants resulted to be about 11 thousand yen per cow.