Stripping Because You Want to Versus Stripping Because the Money is Good: A Latent Class Analysis of Farmer Preferences Regarding Filter Strip Programs

Governments in Ohio have attempted to limit nutrient runoff in the Maumee watershed from agriculture through the establishment of Payment for Ecosystem Services (PES) programs, in which farmers are paid to implement Best Management Practices (BMPs) such as grass filter strips. This paper seeks to understand which farmers are likely to opt into these PES programs and how farmer preferences for these programs are influenced by program attributes and farmer perceptions towards BMPs. We examine these questions using responses from a survey of Ohio farmers, where farmers choose between two PES programs and a status quo (no program) option. We allow for farmer heterogeneity using latent class analysis and find two classes of farmers. One class, denoted the “Environmental Steward” class, has a strong preference for opting into filter strip programs. Furthermore, increasing perceptions of filter strip effectiveness has no significant impact on program choice for this class. The second class, denoted the “Other” class, has a strong status quo preference. Increasing perceptions of filter strip effectiveness has a significant positive effect on members of this class. Both classes prefer programs with larger payments, smaller filter strips, and less paperwork, while program length is not significant.