New Zealand farmers’ adoption of good management practices: Does busy road frontage matter?

Abstract

Background: New Zealand’s agricultural industry faces the challenge of maintaining its contribution to the tradable economy under increasing public scrutiny. In particular, public scrutiny makes it hard for primary industry to maintain its ‘social license to operate’ (SLO), i.e. the informal approval or acceptance communities grant to a business or industry. Adopting good management practices (GMPs) to meet societal expectations of environmental and social performance of farming is central to obtaining SLO. Yet what if GMPs are unobservable or otherwise hidden from the public eye? Do farmers feel the same pressure to pursue GMPs? To date, studies on the relationships between road frontage and SLO have been restricted to qualitative analysis, and to our best knowledge, none have focused on farmers’ adoption of GMPs.

Objective: To identify the impact of busy road frontage on farmers’ adoption of good management practices that is assumed as a means of gaining or maintaining SLO.

Methods: We used the 2019 Survey of Rural Decision Makers Data, a large-scale survey of farmers, foresters, and growers from across New Zealand (we only considered sheep and beef and dairy farms in this study), to analyse the effects of farms being situated on busy roads on the adoption of GMPs. We employed principle component analysis on 51 GMPs to reduce the dimension, and based on the component scores, we used k-means cluster analysis to determine the best number of farm clusters. The clusters are then used in multinomial regression models to analyse the causal effects of busy road frontage on the adoption of GMPs between and within farmer groups, considering different farm and farmer characteristics (e.g., type of farm, education, ownership, and profitability).

Results and discussion: The cluster analysis determined 5 farmer groups: one group of good performers labelled as “high adopters”, two groups of low adopters labelled as “low adopters” and “water worry-free” (with no waterways and a low adoption rate on average), and two groups in between the high and low adopters. The regression results show: 1) busy road frontage effect was found to be only significant between high adopters and low adopters, where being located in front of a busy road may reduce the “distance” of adoption rate between the two groups; 2) busy road frontage effect (within farmer group) was found to be statistically positive for all the GMPs, in particular within the group of high adopters and low adopters. The findings of the study indicate that being observable to the public (farms fronting a busy road) stimulates the adoption of GMPs, in particular, high and low adopters tended to be responsive to be seen by the public, seeing it as a way to maintain or gain SLO.