Research / Determinants of On-Farm Investments in Environmental Protection

Determinants of On-Farm Investments in Environmental Protection

Researchers: Emmanuel K. Yiridoe, Nova Scotia Agricultural College; Mike Trant, Statistics Canada; J. Stephen Clark, Nova Scotia Agricultural College

Research Summary

The Agricultural Policy Framework (APF) provides the framework for developing, implementing and sustaining environmentally-responsible agricultural production for the 21st Century. In deed, environmental protection is a major pillar specifically identified under the APF. Farm environmental stewardship has become so important in farming, with farmers changing their practices and investing in improvements to protect natural resources on and off the farm. As part of the federal government’s commitment to help improve the environmental consequences from farming, Agriculture and Agri-Food Canada (AAFC) and Statistics Canada have jointly begun to collect data on on-farm investments in environmental protection by farmers, through the Farm Financial Survey (FFS). The nationwide survey data (which relates to environmental protection) includes three categories of environmental protection expenditures, namely: i) manure storage construction or major renovation; ii) pesticide, chemical or fuel storage construction, or major renovation; and iii) shelterbelts, windbreaks, buffer strips and fences for waterway protection. The FFS data represent a rich source of information that can be used to monitor trends in environmental investments, as well as the factors that could affect these trends, including government policy. The primary purpose of this research project is to investigate the factors that affect on-farm investments in environmental protection. Specific objectives of the research are: i) to develop a theoretical model that identifies the factors (including policies) that affect farm investments in environmental protection by producers; and ii) to use statistical/econometric methods to investigate the socio-economic and farmer attitudinal factors that influence farm environmental protection investment decisions.

Significance of Research

One of the weaknesses of current analysis of environmental policies in Canada is that much of it is of a theoretical nature. When figures are applied to these studies, results are mostly generated from model parameters. There is little evidence of a statistical nature that could be used to either identify the factors that affect farm level investments in environmental amenities or the efficacy of governmental policies geared to affect these investments. While past research is appropriate given the lack of data, the existence of on-farm records related to these investments (i.e., the FFS data) implies lack of data availability is no longer a factor that precludes such investigations, and therefore needs to be studied. Thus, the study will help stakeholders (such as policy analysts, decision-makers, and farmers) better understand the factors which affect on-farm investments in environmental protection. Second, access to the national FFS data will be obtained through collaboration with Statistics Canada scientists. This partnership involving scientists from government and university organizations is an important and unique initiative being promoted and encouraged by Statistics Canada and Agriculture and Agri-food Canada.

Summary of Research Results: Yet to come.