Design of substrate supply contracts for biogas plants
AbstractFor a sustainable development of energy production in biogas plants, the continuous supply with substrates is essential. To the authors’ knowledge, there have not been carried out any quantitative investigations of farmers’ choices with regard to supply contracts for biogas plants. Thus, it has been only possible to a limited extent to make predictions for a targeted design of supply contracts. We therefore investigated different factors, which might be relevant for the conclusion of substrate supply contracts, by conducting a survey with 178 German farmers. The survey included a choice experiment, in which participants were confronted with different contract attributes (features). These attributes were varied systematically and thus revealed the influence of each individual feature on the probability of contract conclusion. It becomes clear that the farmers interviewed prefer to conclude contracts with other farmers or with a bioenergy village to non-agricultural investors. The probability of contract conclusion decreases with an increasing lifetime of the contract. However, a contract with a higher sales price is more attractive for the farmers. The investigation of the characteristics of respondents shows that the amount of the premium for one additional year of contractual lifetime depends on the individual valuation of the entrepreneurial freedom of the respective farm manager. It cannot be established that risk-averse farmers tend to prefer contracts with fixed prices over contracts with price adjustment clauses. In addition, there are no great differences in the choice behaviour of farmers who have signed a substrate supply contract and farmers without this experience. Regarding the expansion of renewable energies, these findings are meaningful for a target-aimed design of supply contracts.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Australian Agricultural and Resource Economics Society in its series 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia with number 124428.
Date of creation: Feb 2012
Date of revision:
Contact details of provider:
Postal: AARES Central Office Manager, Crawford School of Public Policy, ANU, Canberra ACT 0200
Phone: 0409 032 338
Web page: http://www.aares.info/
More information through EDIRC
Renewable energy; bioenergy; substrate supply contract; contract design; (labeled) choice experiment; Resource /Energy Economics and Policy;
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- G. A. A. Wossink, 2003. "Biodiversity conservation by farmers: analysis of actual and contingent participation," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 30(4), pages 461-485, December.
- Ani L. Katchova & Mario J. Miranda, 2004. "Two-Step Econometric Estimation of Farm Characteristics Affecting Marketing Contract Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 88-102.
- Ping Qin & Fredrik Carlsson & Jintao Xu, 2011. "Forest Tenure Reform in China: A Choice Experiment on Farmers’ Property Rights Preferences," Land Economics, University of Wisconsin Press, vol. 87(3), pages 473-487.
- Lisa A. Cameron, 1999. "The Importance of Learning in the Adoption of High-Yielding Variety Seeds," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 83-94.
- Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Juergen Schupp & Gert Wagner, 2005.
"Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey,"
2096, The Field Experiments Website.
- Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jurgen Schupp & Gert Wagner, 2005. "Individual risk attitudes: New evidence from a large, representative, experimentally-validated survey," Framed Field Experiments 00140, The Field Experiments Website.
- Dohmen, Thomas J & Falk, Armin & Huffman, David & Schupp, Jürgen & Sunde, Uwe & Wagner, Gert Georg, 2006. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," CEPR Discussion Papers 5517, C.E.P.R. Discussion Papers.
- Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2005. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," Discussion Papers of DIW Berlin 511, DIW Berlin, German Institute for Economic Research.
- Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe & Schupp, Jürgen & Wagner, Gert G., 2005. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," IZA Discussion Papers 1730, Institute for the Study of Labor (IZA).
- Enno Bahrs & Stephan Kroll & Matthias Sutter, 2008. "Trading Agricultural Payment Entitlements: An Experimental Investigation of Bilateral Negotiations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(5), pages 1201-1207.
- Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, April.
- Gebrezgabher, Solomie A. & Meuwissen, Miranda P.M. & Oude Lansink, Alfons G.J.M., 2010. "Costs of Producing Biogas at Dairy Farms in The Netherlands," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 1(1).
- Steffen Andersen & Glenn W. Harrison & Morten I. Lau & E. Elisabet Rutström, 2008. "Eliciting Risk and Time Preferences," Econometrica, Econometric Society, vol. 76(3), pages 583-618, 05.
- David R. Just & Steven Y. Wu, 2009. "Experimental Economics and the Economics of Contracts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1382-1388.
- Brian Roe & Thomas L. Sporleder & Betsy Belleville, 2004. "Hog Producer Preferences for Marketing Contract Attributes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 115-123.
- Peter Bogetoft & Henrik Ballebye Olesen, 2002. "Ten rules of thumb in contract design: lessons from Danish agriculture," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 29(2), pages 185-204, June.
- Musshoff, Oliver & Hirschauer, Norbert, 2008. "Investment planning under uncertainty and flexibility: the case of a purchasable sales contract," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(1), March.
- Enneking, Ulrich, 2003. "Die Analyse von LebensmittelprÃ¤ferenzen mit Hilfe von Discrete-Choice-Modellen am Beispiel Ã¶kologisch produzierter Wurstwaren," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 52(5).
- Tiedemann, Torben & Breustedt, Gunnar & Latacz-Lohmann, Uwe, 2011. "RisikoberÃ¼cksichtigung in der nicht parametrischen Effizienzanalyse: Auswirkungen auf die Effizienzbewertung von deutschen Schweinemastbetrieben," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 60(4).
- Brian E. Roe & David R. Just, 2009. "Internal and External Validity in Economics Research: Tradeoffs between Experiments, Field Experiments, Natural Experiments, and Field Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1266-1271.
- Loewenstein, George, 1999. "Experimental Economics from the Vantage-Point of Behavioural Economics," Economic Journal, Royal Economic Society, vol. 109(453), pages F23-34, February.
- Key, Nigel D., 2004. "Agricultural Contracting and the Scale of Production," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 33(2), October.
- Jongick Jang & Frayne Olson, 2010. "The role of product differentiation for contract choice in the agro-food sector," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 37(2), pages 251-273, June.
- Train,Kenneth E., 2009.
"Discrete Choice Methods with Simulation,"
Cambridge University Press, number 9780521747387, April.
- Reise, Christian & Musshoff, Oliver & Granoszewski, Karol & Spiller, Achim, 2012. "Which factors influence the expansion of bioenergy? An empirical study of the investment behaviours of German farmers," Ecological Economics, Elsevier, vol. 73(C), pages 133-141.
- Adamowicz W. & Louviere J. & Williams M., 1994. "Combining Revealed and Stated Preference Methods for Valuing Environmental Amenities," Journal of Environmental Economics and Management, Elsevier, vol. 26(3), pages 271-292, May.
- Nigel Key, 2005. "How much do farmers value their independence?," Agricultural Economics, International Association of Agricultural Economists, vol. 33(1), pages 117-126, 07.
- List John A. & Sinha Paramita & Taylor Michael H., 2006.
"Using Choice Experiments to Value Non-Market Goods and Services: Evidence from Field Experiments,"
The B.E. Journal of Economic Analysis & Policy,
De Gruyter, vol. 5(2), pages 1-39, January.
- John List & Paramita Sinha & Michael Taylor, 2006. "Using choice experiments to value non-market goods and services: Evidence from field experiments," Natural Field Experiments 00278, The Field Experiments Website.
- Cheung, Yin-Wong & Friedman, Daniel, 1998. "A comparison of learning and replicator dynamics using experimental data," Journal of Economic Behavior & Organization, Elsevier, vol. 35(3), pages 263-280, April.
- Hoyos, David, 2010. "The state of the art of environmental valuation with discrete choice experiments," Ecological Economics, Elsevier, vol. 69(8), pages 1595-1603, June.
- Key, Nigel D. & MacDonald, James M., 2006. "Agricultural Contracting Trading Autonomy for Risk Reduction," Amber Waves, United States Department of Agriculture, Economic Research Service, February.
- Schmitz, Kim & Schmitz, P. Michael & Wronka, Tobias C., 2003. "Bewertung von Landschaftsfunktionen mit Choice Experiments," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 52(8).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.