Exploring the Decision Making of Dutch Dairy Farmers Under Policy Uncertainty

Summary

Policy uncertainty is important for farmers. Many Dutch dairy farmers are affected by policy uncertainty. For example, uncertainty about policies related to emissions can cause financial problems for farmers. Despite uncertainty, farmers still make decisions about their farm. In this study, we explored the relation between policy uncertainty and decision making. We focused on two types of decisions. First, we focused on investment decisions, such as investments in a bigger stable. Second, we focused on management practices, such as increasing the grazing time. To do this, we used amongst others simulation methods, a participatory Bayesian network and a discrete choice experiment. We found that farmers are very concerned about policy uncertainty. Moreover, we found that policy uncertainty can both delay and speed up investment timing. In the case of reducing nitrogen emissions, we found that farmers prefer management practices of investment options.