Multiple Forms of Uncertainty as a Barrier to the Adoption of Sustainable Farming Practices

In general, the primary sources of variability that impacted producers were drought, low wheat prices, and high nitrogen prices. Spatial variability was relatively unimportant to producers, and weed variability substantially impacted a small number of producers but was overall less important. Thus, the focus of the project shifted substantially after the case studies and initial surveys to focus on these three primary stressors.

Economic Variability and Vulnerability

Within the U.S. and the NGP in particular, it was expected that the quantity used and cost of fertilizer had increased from 1970 until present, burdening farmers with increased input expenditures. The census data confirmed this expectation, with amount of fertilizer used per acre consistently increasing from 1970 onwards (Figure 1), even though the specific forms of nitrogen fertilizer changed from predominantly anhydrous ammonia to urea. Similarly, the price of fertilizer consistently increased (Figure 2), with the most common form of fertilizer in the NGP today, urea, costing $0.17/kg in 1960 and $0.58/kg in 2012.

The total cost of fertilizer, accounting for the different fertilizer mixes, prices, and quantities used across years, computed on a per-hectare basis, also increased substantially from 1970 through 2011 (Figure 3). However, the wheat price also increased during this time period, from $.08/bu in 1974 to $.28/bu in 2011 (Figure 4).

Despite the simultaneous rise in wheat and fertilizer prices, deviations in the N-W price ratio have consistently increased (Figure 5), with the exception of the 2002 census year. The PZI was more variable during this time period, with elevated periods of moisture stress (positive values = greater stress) during the early and late 1980s and during the early-mid 2000s. Together, the additive total stress of these components appeared to reach its zenith in 2001. These periods of total stress closely parallel events such as the extended droughts in the 1980s and early 2000s.

Number and Quality of Options for Mitigating Variability and Stressors

A total 54 survey responses, 17 semi-structured interviews, and three case studies were used to understand the suite of options that farmers would consider in response to drought or high nitrogen prices. The quantity and quality of tools available would be expected to partially determine the vulnerability of farmers to drought and economic trends outlined in the previous section.

IIA - DROUGHT

Planting a mix of drought-tolerant and drought-intolerant crops provides farmers with a way to hedge against the risks of low or high-moisture years. During dry years, drought-tolerant crops thrive while the drought-intolerant crops underperform, and vice versa. Such a strategy reduces the variance of net returns, eliminating the possibility of high profits during climatically favorable years but reducing the risk of failure when drought occurs.

When asked how they would respond to a scenario of prolonged drought, the majority of farmers indicated that they would only sow an alternative crop (31%), with fewer farmers suggesting they would sow two (28%), three (11%), four (6%), and six (1 respondent) alternative crops. The specific crops mentioned were highly variable (Table 1), with the largest numbers of farmers suggesting wheat, which is already the dominant crop, or that they were unsure or needed more information.

Management practices that the farmers had at their disposal to manage the impact of drought (Table 2) were very limited, with many of the practices, such as no-till, being already used. Other responses reflected this lack of readily accessible options, including reducing expenses, lowering yield goals to reduce the amount of fertilizer used, changing planting dates, and utilizing crop rotations to increase moisture retention.

Pathways of Adaptation

The conceptual map depicting the process of farmer adaptation is best described as a funnel of constricting possibilities, with new practices filtered out (sieved) in discrete stages (Figure 6). The map is similar to the broader sociological literature on adoption (Mason 1964, Ruttan 1996, Marra 2003), which characterizes the process using the general stages of Awareness, Interest, Evaluation, Trial, and Adoption. The key component which differentiates this study is the inclusion of economic and climatic stressors as drivers in the process of adaptation. The very top of the funnel is where the greatest number of outcomes is possible. At this stage, which we refer to as the blank slate stage, farmers are exposed to the largest number of information sources, and they are unconstrained by any stressors or preconceptions which may limit their future choice of agricultural options.

For the descriptions of the stages a brief overview is provided; more details including specific producer comments may be found in the upcoming journal article in Climatic Change.

BLANK SLATE STAGE

During this stage, farmers consult a variety of information sources (Figure 8), seeking out different agronomic authorities for different solutions. Farmers have to be adept at accessing many different information sources; as the quality level of information provided by some of the previous technical sources was cited as declining (possibly due to breadth of information now required), it may help to explain why the majority of them most heavily rely on personal experience for day-to-day decisions. The interview data support this observation, with farmers citing a diversity of sources including internet forums, extension publications, university personnel, chemical dealers, and personal experience for their sources of agronomic information. During the blank slate stage, the farmers are also free of climatic, economic, or other stressors. Naturally, they are also exposed to these sources of information during times of stress, but when stressors are in play, they prevent (Stressor Constraint Stage) farmers from being able to act on any information obtained.

Whether from the internet, extension agents, or another source, farmers are thus exposed to new practices that they have not already employed. This may take the form of chemical/seed dealers proposing a new herbicide or farm magazines promoting a new crop. However, when farmers are stressed, they unanimously cut back on trials of new practices, operating reactively instead of proactively.

FARM FIT STAGE

During this stage, the most important criterion cited for evaluating a new practice was its economic viability, which means that it either lowers costs for the farmer or taps into a lucrative market (for a new crop). For example, many farmers are currently considering planting dryland corn due to relatively high current corn prices.

Secondary to economic opportunity, the prominent consideration for farmers is rotation. Every farmer interviewed emphasized a belief in the value of rotating crops, both for reducing weed and pest issues, but also for reducing nitrogen costs and for increasing the intensity of cropping (rather than having years of fallow).

Logistics and the time required to implement a new practice was the third most frequently cited constraint for adoption. Most NGP farmers work long hours during the growing season by themselves or with a limited number of other family members or employees; thus, the difficulty of dealing with new equipment, making more passes with the herbicide sprayer, or expending other precious time is a significant consideration.

MICRO-ANALYSIS STAGES

The final four stages that farmers go through before new crops or practices are integrated into their farming operations involve detailed considerations that may support or rule out the change. At first, farmers gather detailed information on equipment requirements, fertilization, or other factors that must be known to actually implement the change. Next, farmers re-visit observations or comments from their peers that may validate or reject the proposed practice. These observations and or social learnings may, at any point during the adaptation process, irreversibly convince farmers to abandon their exploration of the new practice. Social observations (farmers watching neighbor farmers), in particular, are very strong motivations or deterrents.

If everything appears to be suitable and feasible for the farmer, then every farmer surveyed mentioned that they will implement a test field of the new crop or practice. These trials range from 40-360 acres, with an average of 200 acres used.

PSYCHOLOGICAL DRIVERS

Throughout the adaptation process, there may also be psychological drivers or influences that propel farmers to increase or decrease the speed of adoption. One primary driver is the perception of farmer-to-farmer competition.

A variety of psychological drivers were mentioned; however, increasing the individual farmer's social recognition as a progressive or high-producing farmer was the most highly cited reason for making specific agronomic decisions. A preference for risk-taking was also a clear psychological driver for some farmers but was not examined in enough depth to draw generalizations.

Discussion

TOTAL STRESS

In this report, we have illustrated the gradually increasing stress experienced by farmers since 1974, which has been primarily driven by the nitrogen cost to wheat price received ratio. Drought has amplified this stress during key periods, such as in the early and late 1980s, and in the late 1990s to early 2000s, yet it remains relatively unpredictable. In contrast, the N-W ratio has been driven steadily higher by higher fertilizer prices (relative to wheat prices) and increased fertilizer use. The explanations for increased fertilizer use are complex; however, they may be partially explained by the concept that farmers “fertilize for the good years” (Babcock 1992), with the assumption that increased profits under favorable weather conditions offset the costs of over-fertilizing during bad years. This assumption depends on the rate of increase of the marginal productivity of nitrogen as precipitation increases, and the marginal increase in net returns from increased yields. In dryland scenarios with a non-linear yield response and extended periods of drought, this strategy of over-fertilization may be detrimental to net returns and, therefore, may increase total stress. Farmer adaptation to these stressors parallels their temporal predictability, which, as discussed later, suggests specific approaches for increasing adaptability.

DROUGHT ADAPTATIONS

Given the paucity of crops and management practices cited by farmers for managing drought, farmers could face serious consequences if a severe drought were to develop in the NGP. Such droughts are not uncommon, with the most severe of the 20^th century occurring during the dust bowl of the 1930s and the drought of the mid to late 1980s. During such conditions, most farmers chose to exclusively plant wheat and fallow their fields more frequently, which are economically rational decisions over short time periods. Unfortunately, such decisions are not rational over longer time scales, because cutting back on rotational crops ultimately reduces long-term resilience to drought by reducing the formation of soil organic matter which is important for retention of soil moisture. This is consistent with the observation that adverse events that are low-probability, high-consequence, and primarily observable through statistics, are less likely to elicit evasive actions than those that have immediate, visible effects (Weber 2006).

N-W RATIO ADAPTATIONS

Although rotations were more widely viewed as a benefit for weed and pest suppression than for mitigating the effects of high nitrogen prices, their status as the second-most cited mitigation technique (behind cutting back on application rates) points to their future potential. Simply reducing the amount of nitrogen applied has the advantage of a quick reduction in costs; however, it also depletes the pool of soil N and inevitably results in lower yields. Leguminous rotations; however, are able to supply a significant quantity of N to the cash crop, albeit only after used continuously for six years (Campbell et al. 1992, Walley et al. 2007). Whether by emphasizing the reduced costs of weed and pest control or by promotion as a way to reduce nitrogen costs, pulse crops are the most viable method for increasing resilience to a high N-W ratio. Both justifications fit in with the primary concern of farmers being economic viability. Furthermore, leguminous rotations simultaneously assist in building soil organic matter, which has concurrent implications for mitigating drought by increasing soil moisture holding capacity. Interestingly, controlled-release fertilizers (formulations that release slowly) were not mentioned despite their potential for reducing fertilizer costs by lowering the amount of nitrogen lost to volatilization or leaching (Gioacchini et al. 2002).

ADAPTABILITY AND INTERACTING STRESSORS

The squeeze of the bioeconomic vise discussed in this paper is driven by jaws that move at different speeds and frequencies. The inexorable increase of the N-W ratio moves one jaw of the vise with enough apparent predictability that farmers have the option of slowly adapting through the gradual incorporation of pulse crops or other methods of increasing nitrogen use efficiency. The jerky motion of the opposing drought vise makes adaptation far more difficult, and it excludes mitigation strategies and experimentation at the time that they are most needed. Resilience through crop rotation does appear to be slowly increasing, with 51,000 acres devoted to pulse crops in 1998 and 638,000 (11.3% of NGP cropland) acres in 2013 (USDA NASS). However, this resilience is interrupted during periods of drought, and it remains to be seen whether adoption can outpace the slow yet continuous increases of the N-W price ratio.

Periods of intense stress, when both the N-W ratio is high and soil moisture is limited, are thus unlikely to be profitable times for increasing farmer adaptability. Farmers’ economic freedom to experiment is also more limited during these periods, as crop insurance reimbursement rates decrease (calculated based on five-year averages) and insurance for non-standard crops remains more difficult to obtain. Although farmers are constantly exposed to a variety of information sources, their economic conservatism will likely trump their belief in the value of rotations. Furthermore, their peers are unlikely to have positive demonstrations of rotational crop performance during such periods, which prompts an even greater reduction in experimentation. It has been argued by some economists that farmers are correct in this hesitation because the costs of experimentation outweigh the value of information gained by waiting for the trajectory of future conditions to become clear (Lombardi 2009). Yet while this “option value” would be rational for a stressor like the N-W price ratio that appears to have a somewhat predictable signal, it would not hold true for climatic stressors that are highly variable and uncertain for specific locations.

Thus there exists a conflict between short and long-term economic and agronomic rationality that ultimately serves to decrease the resilience to these stressors during times of drought. Drought mitigation through the improvement of soil organic matter requires ~20 years (West and Post 2002), and increasing the nitrogen supplying power of soil requires at the very least six years (Campbell et al. 1992, Walley et al. 2007); hence, economic incentives may be required to maintain rotations even in the presence of drought. These incentives could be aligned with efforts to increase carbon sequestration, which have found that increasing rotational complexity could sequester an average of 20 ± 12 g Carbon m⁻² yr⁻¹ (West and Post 2002). However, without incentives, even producers (such as organic farmers) who may have a stronger long-term motivation to increase organic matter and who are aware of the benefits in doing so are subject to the short-term need to maximize profits (Knutson et al. 2011). Therefore, market development for drought-tolerant crops or policy incentives to increase long-term drought resilience may be required.

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• Figure 5. Deviations in the N-W price ratio and PZI index from their average values, and their additive sum from 1970-2011.
• Figure 8. Information sources used by farmers.
• Figure 4. Historical wheat prices, 1970-2011.
• Figure 1. Kilograms of fertilizer used on a per-hectare basis in Montana, 1974-2011.
• Figure 2. Price of commonly used fertilizers, adjusted for inflation (1980=100).
• Figure 3. Historical total fertilizer cost per hectare.
• Table 2. Alternative management practices cited by producers for mitigating drought impacts.
• Figure 7. Conceptual map of the farmer adaptation process.
• Table 1. Summary of the types of alternative crops farmers stated they would use in response to extended drought (each respondent could list more than one). For comparison to existing knowledge, crop evapotranspiration coefficients (relative to a reference grass) are provided at early, mid and late season, which indicate generalized water requirements (FAO 1998). Higher Kc values suggest greater water demand and less drought tolerance. Late-season Kc values are particularly important in the NGP.