Farmers’ adoption of extensive wheat production – Determinants and implications

► We analyze Swiss farmers’ adoption of extensive wheat production. ► Smaller farms with low levels of input use were first year adopter. ► Intensively producing farms usually not adopt extensive wheat production. ► The effectiveness of voluntary participation in agri-environmental programmes should be re-considered. Using farm-level panel data, we analyze farmers’ adoption decisions with respect to extensive wheat production, which is supported in Switzerland since 1992 with an ecological direct payment scheme. It shows that in particular farms with a small area under wheat, low levels of input use and low wheat yields adopted extensive wheat production in the first phase of the programme. If later adoption phases are included in a duration analysis, the difference in wheat area between adopters and non-adopters vanish. However, the level of wheat yields and input use still tend to be lower for adopters. Hence, less intensive producing farms (with lower yield levels) are much more likely to adopt extensive wheat production, which indicates free-riding effects. In contrast, more intensively producing farms, i.e. those farms that may actually harm the environment, usually not adopt extensive wheat production. Thus, aggregated environmental effects of this programme may not reach its full potential and the effectiveness of voluntary participation in agri-environmental programmes should be re-considered. Moreover, we find that changes in wheat prices and the ecological direct payment significantly influenced adoption decisions.