Incorporating ‘Nudge’ in Agri-environmental Program Design to Stimulate BMP Adoption: Does It Work?

Abstract

Sustainable agriculture refers to an environmentally friendly agriculture sector that ensures safe production for both current and future generations. To address climate change’s impact on Canadian agricultural production and mitigate the harmful environmental effects of agriculture, promoting Best Management Practices (BMPs) is a proposed strategy by researchers. Agri-environmental programs and policies are used to motivate farmers to adopt BMPs. However, there is still a lack of research on how to design those programs to achieve the optimum level of participation. In this thesis, I use a two-paper approach to analyze whether behavioral nudges can effectively encourage farmers toward adoption. The first paper (chapter 2) presents an extensive literature review focusing on behavioral factors in BMP adoption and evidence of using behavioral nudges in the agri-environmental sector. The findings reveal that several behavioral factors could impact farmers’ decision-making regarding BMPs. It also suggests that applying behavioral nudges might effectively help design agri-environmental policies in Canada. The second paper (chapter 3) empirically examines whether incorporating different nudges in agri-environmental program designs can influence Saskatchewan farmers’ participation in those programs. Data for this paper was collected from a large-scale survey conducted on 500 Saskatchewan farmers in 2021. A vignette experiment is used to investigate how farmers rate different hypothetical programs. The results show that although nudges have some positive influence, monetary incentives significantly impact farmers’ decisions to participate in the programs. In this paper, I also analyzed Saskatchewan farmers’ current BMP adoption scenario and discussed their participation in the Environmental Farm Plan (EFP).