Agriculture and Climate Change: Evidence on Influencing Farmer Behaviours

4. Characterising Groups of Farmers to Inform Agricultural Policy Development and Delivery

4.1 Introduction

The evidence base indicates that a whole variety of factors affect farmers' behaviours, as discussed in Chapter 3. The diversity of the farming community itself is also widely recognised. For these reasons, it is important to find meaningful ways to group farmers into more heterogeneous sub-groups, or segments. By exploiting the similarities of the sub-groups, farmers' attitudes and behaviours can be better understood, modelled and predicted, and policy levers more effectively shaped to influence farming practice.

Extensive research has been undertaken to group farmers in ways that help to inform agricultural policy. A number of studies have generated farmer typologies which include personal attributes and characteristics as well as business structure and geographical and environmental characteristics (some of these are highlighted elsewhere in this report). This chapter explores work that focuses more on farming style, and the motivations, objectives and attitudes that underpin the approach that farmers take to their businesses. In particular, influential work by Defra has explored the diversity of farming communities and the range of factors motivating individual farmers. Identifying the characteristics of particular groups of farmers is important to more accurately predict the uptake of policy measures, and the ways in which uptake might be more effectively encouraged. The body of this chapter focuses on the key messages to come from the Defra work to date, along with other studies that have used the Defra segmentation model, but a summary of relevant earlier work is also included (Defra, 2008).

4.2 Farmer values

Although definitions vary in the literature, there is broad agreement that 'values' are relatively enduring cognitive structures which underlie the choices and decisions that individuals make in various aspects of their lives. In a useful summary of the relevant literature, Garforth and Rehman (2006) summarise seminal empirical research by Gasson in the 1970s, which defined the values and goals associated with farming as follows:

• Instrumental - making a satisfactory income; safeguarding the income for the future; expanding the business; providing congenial working conditions
• Social - gaining recognition and prestige; belonging to the farming community; continuing the family tradition; working with other members of the family; maintaining good relationships with workers
• Expressive - feeling pride of ownership; gaining self-respect for doing a worthwhile job; exercising special abilities and aptitudes; the chance to be creative and original; meeting a challenge, achieving an objective, personal growth of character
• Intrinsic - enjoyment of work tasks; preference for a healthy outdoor farming life; purposeful activity, value in hard work; independence - freedom from supervision and to organise time; control in a variety of situations.

Gasson's research was based on surveys of farmers who ranked a set of value statements, and is important because of the support it provides to the importance of non-economic values in agriculture. As noted by Garforth and Rehman, subsequent studies have recognised the complexity of farmers' goals and values and that dividing them into behavioural types on the assumption of simple profit maximising behaviour is increasingly difficult to sustain. In 2006, they modelled farmers' attitudes and responses to the introduction of the Single Payment Scheme in England. They concluded that economic drivers are not necessarily paramount for all farmers: environmental, family, lifestyle and stewardship motives are equally, and sometimes more, important. These non-economic drivers are long term goals, while the economic drivers reflect shorter term objectives (Garforth and Rehman, 2006).

Scottish farmers' values and behaviours

Research by Willock et al (1999a, 1999b) investigated individual differences in Scottish farmers' attitudes, objectives, and farming behaviour, and associations between these individual differences and farmers' personality traits. A total of 245 farmers took part. The study found that farmer objectives (successful business goals, conservation, quality of life, status and off-farm goals) acted as mediators between attitudes and behaviour. Openness in farming (willingness to entertain the ideas of others, and to learn about innovations in farming practice) influenced quality of life objectives and had a direct influence on environmentally-oriented farming behaviour. The influence of farm size was largely independent of psychological factors.

Willingness to trade profits for stewardship

More recently, work in the US investigated the trade-off agricultural producers face between profits and stewardship activities when selecting farm practice (Chouinard et al, 2008). An empirical study and analysis of findings from farm practice surveys allowed the development of a model identifying three main types of farmer:

• A pure profit-maximising farmer, motivated only by income and wealth effects of farming, and indifferent to whether the farm is generating positive or negative environmental effects
• A farmer who values environmental effects only to the extent that they provide direct personal benefits, such as recreational opportunities, or a good view
• A farmer who is additionally motivated by the social utility from their stewardship actions. This type is equivalent to the true steward, who is willing to forgo personal profits in the interests of conservation.
• The authors noted that, in reality, there is likely to be a continuum, rather than the three clear farmer types. However, the types are useful to test whether some farmers might be prepared to make personal sacrifices with no apparent personal reward. The evidence suggests that stewardship farmers have a stated willingness to forgo profits for conservation. Not all farmers stated a willingness to forgo profits, but the amounts stated by those who were willing to trade profits for conservation activities were at reasonable levels for the size of the farm in question.

4.3 Farming style

The 'styles of farming' approach to understanding diversity in farming communities attempts to explain the social nature of diversity in agriculture. Developed in the Netherlands and applied in a range of farming situations in Australia, the essential defining characteristic of a set of styles is that they explain the diversity in agriculture in a specific region (Vanclay et al, 2006). A recent, major study in the Victoria region of Australia which involved 1,500 farmers (Widcorp, 2009) set out to analyse and benchmark attitudes and level of knowledge about climate change, and to suggest useful guidelines for better targeting of climate change policy and advice. Cluster analysis of data was used to identify farming styles, based on specific characteristics (farmer attitudes towards farming and views on climate change). Four specific farming styles were derived from the survey data:

• Autonomous - older farmers; a traditional and self-reliant approach to farming; unlikely to try out or finance new ideas. If they understand how climate change will affect them, they are likely to be more interested.
• Speculative - little interest in developing their farming enterprise for the longer term, as farming is unlikely to be their preferred occupation. However, they may be prepared to take some risks to finance growth/diversification for short term gains.
• Ambitious - younger farmers; prepared to take risks to grow or diversify their enterprise; business minded, profit driver and plan ahead. Open to, and value, new ideas and new technology. Agree that they need more information to manage their farm better.
• Prudent - will take on new ideas and technologies, but are not likely to take financial risks. These are, on the whole, well educated farmers with small farms, who see climate change as serious and related to human activity.

Clearly there are substantial differences between Australian and Scottish farming environments, but messages in relation to farming style may be transferable.

4.4 Understanding and modelling the behaviour and motivations of farmers in responding to policy changes

The usefulness of a segmentation approach for agricultural policy is recognised in the UK, and extensive research has been undertaken by Defra in this area. An influential publication (Defra, 2008) explored a range of studies undertaken in England in relation to farming style and practical approach in the context of decision making.

As described more fully in a later paper (Pike, 2011), the Defra model of farmer segmentation is basically about defining farming style; i.e. describing how farmers approach their businesses. For example, some farmers are more business-focused; others value succession most highly. While farm decisions are constrained by physical conditions (such as soil and climate) and structure of business (fixed capital etc) the accommodation of change depends also on underlying motivations, objectives and attitudes. Continuity in these values does persist, but values can change over time (for example in terms of succession; changes in life stages and attitudes). The importance of a segmentation framework is in using a deeper understanding of who farmers are, what they do, what they think and feel, and how they respond to policies in order to help policy makers to articulate messages and design long-lasting solutions. Segmentation can help with:

• Promoting awareness and understanding
• Tailoring (and not a 'one size FiTs all')
• Recognising why people behave differently (Wilson et al, 2011)
• A telephone survey of 750 farmers (from the Defra database of registered holdings) used a selection of 17 objective and value questions which earlier research had identified as significant predictors and most influential in assigning respondents to segments. A five group farmer segmentation model was built up on the basis of the evidence: custodians (23% of the sample); lifestyle choice (6%) pragmatists (22%); modern family business (41%); challenged enterprises (7%).The chief characteristics of the groups are as follows:
• Custodians
• Farming is their preferred lifestyle, and gives them a good quality of life
• The farm allows them to spend time with their families. They would be happy if their children wanted to inherit the farm
• Most profit is reinvested in the farm
• Proud to be farmers, supporting the tradition and protecting the countryside.
• Lifestyle choice
• Farming is not their main source of income; often it is a hobby
• Entrance into farming happened through marriage or a conscious personal decision, sometimes late in life
• Prefer traditional farming practices; see farming as a source of joy, and of a balanced lifestyle
• Do not place much emphasis on succession, expansion or investment in the farm.
• Pragmatists
• Well balanced between enjoyment from farming, money making and satisfaction from life
• The majority were born into farming and run the farm in partnership with family members. However, issues of succession are not that important to them
• Value the experience of previous generations, but are open to new farming techniques, and are in harmony with the environment
• Do not care about making huge profits, but want to stay in business and are willing to diversify/adjust their practices rather than quit farming.
• Modern family businesses
• Majority were born into farming and hope their children will continue the family tradition
• Enjoy the fact that farming gives them independence and get satisfaction from passing their farming knowledge on to their children
• Prefer practical work to administration, but are comfortable with paper work
• Search for opportunities to expand and increase profit.

Challenged enterprises

• Likely to struggle the most financially, with hard work and long hours taking their toll on life satisfaction
• In farming because of obligation, rather than personal choice
• Feel isolated from the farming community, lack support and social life
• High costs, resource constraints and low profits make them pessimistic about the future of the business.

The Defra segmentation programme of work has also investigated the likely responsiveness of the individual groups to policy measures (Pike, 2011) and found that this is likely to vary a good deal:

Custodians

• Will obey the rules, but prefer to be persuaded and encouraged
• Resent regulations they consider damaging to the long term viability of farming
• The likelihood of being influenced is high, particularly if the communication message recognises their conservation role
• This segment is characterised by a high proportion of small holdings, so the cost and time required to keep up to date with rules is relatively greater for them
• May unconsciously disobey regulations, especially if the logic is not clear.

Lifestyle choice

• Likely to be responsive to messages around the emotional aspects of farming
• Information on good farming practice is also welcomed
• Unlikely to be well informed about regulations, or have time to keep up to date with them
• Get satisfaction from doing their job well; likely to be familiar with environmental issues
• Willing to comply, but require well targeted communication.

Pragmatists

• Likely to know the rules
• A forward thinking approach to farming techniques; willing to diversify. However, they may 'blank out' more demanding requirements
• Likely to be open to influence, but their love of the farming lifestyle and emotional connection to farming may make them more difficult to influence in circumstances where respecting environmental constraints would impact on their freedom to farm in particular ways
• Business focus and concern for business continuity should ensure that they wish to be compliant, as long as the cost of compliance is not excessive.

Modern family businesses

• See themselves as business people and want to know the potential gains
• Likely to be familiar with the environmental regulations that are important to them, and appreciate advice and information, but wish to stay independent and trust their own judgement
• Clear justification for legislation is required; susceptible to influence if compliance is practical
• May disobey rules, but only if cost appears excessive, or if compliance might threaten their business
• Likely to respond to guidance and advice in an online form.

Challenged enterprises

• Require communication that recognises the challenges and difficulties they face, as well as offering opportunities to save money
• Likely to be least engaged with management techniques, unfamiliar with rules
• Where regulation incurs costs or restraints on current practices, they may choose to disobey
• The segment is characterised by a high proportion of pig and dairy farms, which require infrastructure investments to comply with regulation
• A tailor-made incentive approach might be required, for example linking compliance to additional grants or other financial incentives.

An important publication from work commissioned by Defra and conducted by ADAS and SAC (Barnes et al, 2010) investigated attitudes and motivations for uptake of mitigation measures. Primary research included three farmer workshops (47 people in total, representing the dairy, arable and grazing livestock sectors). Farmers within each of the sectors were characterised according to farm size, personal attributes and the Defra segmentation model. Although the sample was small, the findings do provide some important insights. As in previous work, the distribution indicated that the lowest numbers were in challenged enterprises and lifestyle choice groups:

• Analysis showed no strong divergences in behaviours between segments, although a stronger focus on 'the bottom line' among modern family businesses and pragmatists could be important for encouraging uptake of measures
• Challenged enterprises might be the least eager group to take up new measures, as they are already struggling
• Custodians, lifestyle choice and modern family businesses attach the most importance to GHG reduction.

Findings indicated that the identified attitudes are not necessarily accompanied by actual behaviours. From the limited sample of farmers, uptake of mitigation measures was high in challenged enterprises and lower for custodians, in spite of their level of perception of the importance of climate change. The authors suggested that this might be explained by the economic drivers of uptake, which are dominant for all sectors. Since challenged enterprises struggle the most financially, their efforts to reduce cost might lead them to higher uptake of mitigation measures that reduce production inputs, such as petrol or fertilisers. However, as only five farmers were in the challenged enterprise segment, this finding may not be generalisable to the wider challenged enterprise farmer population.

Another recent study (Wilson et al, 2011) noted that Defra's segmentation approach has been used in previous work to capture farmer behaviours and characteristics in order to understand the drivers behind their decision making. This has often limited the coverage of physical and financial data that have been collected alongside segmentation data. The pilot study by Wilson et al placed the segmentation framework within the Farm Business Survey (FBS) research programme (the FBS is an annual survey which provides information on the physical and economic performance of farm businesses in England).

The main finding of the study was that the characterisation of the segmentation groups, when analysed alongside the FBS data, showed that the expectations of the characteristics of the segmentation groups were broadly met. The distribution of the groups was, broadly, similar to the original Defra assignment, with low percentages in the lifestyle choice (7%) and challenged enterprises (4%)groups. However, more than half the sample classified as pragmatists (53%); while fewer were custodians (14%)or modern family businesses (21%).

Qualitative findings from the research also broadly concurred with expectations, although there was some 'fuzziness' at the boundaries of the segmentation groups. Since the research involved the farmers in the decision making as to their segmentation group, a number of additional factors affected allocation. For example, the presence of a spouse or other family member at the time of interview sometimes meant a difference of views about which was the most appropriate category. The researchers also reported that the choice of segmentation group could be influenced by the time of year, the timing of the visit, and other factors impacting on the farmer at the time of interview (Wilson et al, 2011).

The most recent piece of research by Defra on farmer segmentation, synthesises and supplements the work Defra has done to date. It further discusses the policy use of the segmentation framework and attempts made at integration of the framework within the FBS (Pike, 2011).

Having reviewed the studies, Pike notes that, since the segmentation framework was developed in 2008, the approach has been repeatedly applied and tested. This has helped to clarify the key statements most effective in identifying the most appropriate segment for individual farmers:

• 'my priority is to pass on a viable business to the next generation'
• 'farmers should provide congenial working conditions, hours, security and surroundings for themselves and their staff'
• 'farming gives self-respect for doing a worthwhile job'
• 'local authorities do not understand farmers and their needs'
• 'paying attention to details is crucial in making a success of running a farm'

4.5 Some implications for policy development and delivery

The imperative of climate change makes it increasingly important to encourage a balance of business and environmentally oriented behaviours among farmers. Findings from the work by Chouinard et al in the US supports the concept that at least some producers have a direct stewardship motive to undertake some level of conservation practices, and that they are willing to forgo some profits to adopt these practices. The authors suggest that, to increase producer stewardship, policy makers could subsidise the technology. Invoking both the profit and steward motives in farmers would be likely to appeal to a larger proportion of farmers, and stronger responses from those who have both profitability and stewardship motives (Chouinard et al, 2008).

The usefulness of a segmentation approach has been confirmed in the literature. Gaining a better understanding of the different values, motivations and attitudes of farmers in different segments allows analysts to predict their behaviours more accurately and forecast the uptake of different measures. This potentially allows for better targeted initiatives, sensitive to farmers' value systems as well as their circumstances.

The qualitative element of the work by Wilson et al reflected the difficulty of selecting a particular group, with the researchers noting that a large number of farmers could have been placed in a different group, or one of three or four groups. Also, if farmers are involved in the choice of an appropriate segment, social desirability bias might cause farmers not to reveal their true attitudes, to avoid being identified with a segment they believe to have negative connotations (such as challenged enterprises). The research also highlights the importance of considering that categorisation might change, depending on external or internal factors; and that different family members may have different views of the appropriate categorisation for their business (Wilson et al, 2011).

There are many reasons why challenged enterprises may struggle to keep up with regulations and engage with voluntary initiatives. Factors such as the burden of work, isolation, and pessimism about the future are all likely to play a part. For the same reasons, farmers in this category are likely to be difficult to reach, and to influence. However, both the original Defra work and the FBS research indicate that the percentage of farmers in this category is small. Similarly, the lifestyle choice segment may represent a challenge to policy makers, because farming is unlikely to be the main means of income for this category. This independence may restrict the number of policy levers that can be used. Again, however, the percentage of farmers in this category is not large.

When considering the targeting of scarce resources, it appears that the characteristics of the other three segments, which describe the majority of the farmer population, provide plenty of 'hooks' for engagement. For example, custodians are characterised by their pride in farming heritage; pragmatists are in tune with their environment and balanced between love of farming and the need to make money; modern family businesses are focused on business planning and financial management for the farm.

The similarity between the FBS and its near equivalent in Scotland (the Farm Accounts Survey (FAS)) emphasises the usefulness of the pilot work by Wilson et al. The opportunity to use the FAS to gather information that will allow a segmentation approach to be applied has been recognised, and a questionnaire will be included in the 2013 survey. However, there are issues around the appropriateness of the Defra segment groupings: it will be important to ensure that the segment types make sense to Scottish farmers.

Key points from the literature

The diversity of the farming community is widely recognised, making it important to find ways to group farmers into more heterogeneous sub-groups, or segments. Extensive work on farmer segmentation has been carried out by Defra, and a five group model built up on the basis of the evidence. The likely responsiveness of the individual groups to policy measures has also been investigated.

• Custodians are ready to be influenced, particularly if their conservation role is recognised. They will obey the rules, but prefer to be persuaded and encouraged. The cost and time of keeping up to date with regulations is relatively greater for them, as their holdings are often smaller
• Lifestyle choice farmers are likely to be responsive to messages around the emotional aspects of farming, and are familiar with environmental issues. They are unlikely to be well informed about regulations, or to have time to keep up to date with them
• Pragmatists wish to be compliant for the good of the business, as long as the cost of compliance is not excessive. Their emotional connection to farming may make it difficult to influence them where respecting environmental constraints would impact on their freedom to farm in particular ways
• Modern family businesses want to know the potential business gains. They are likely to be familiar with the environmental regulations that are important to them, and appreciate information, but trust their own judgement. Clear justification for legislation is needed; they are susceptible to influence if compliance is practical
• Challenged enterprises are likely to be least engaged with management techniques, and unfamiliar with the rules. Any time spent on paper work is likely to focus on finances. Where regulation incurs costs or restraints on current practices, they may choose to disobey. A tailor-made approach, such as linking compliance to financial incentives, might be required to reach them.

The Defra segmentation approach has been used in several studies and, of course, the percentages of farmers in the various segments varies from study to study. However, challenged enterprises and lifestyle choice groups are consistently the smallest (each less than 10% of the sample). One study placed over 50% of the sample in the pragmatist group; but the initial Defra survey indicated that more than 40% were classified as modern family businesses, and 23% as custodians.

Work to place the segmentation framework within an existing survey on the physical and economic performance of farm businesses showed that the expectations of the characteristics of the segmentations groups were broadly met. However, the choice of segmentation group could be influenced, to a certain extent, by factors impacting on the farmer at the time of interview.

Some implications for policy development and delivery

• Invoking both the profit and stewardship motives in farmers would be likely to encourage a balance of business and environmentally oriented behaviours
• The segmentation approach allows for better targeting of initiatives that are sensitive to farmers' values, as well as their circumstances. There are plans to use Scotland's Farm Accounts Survey to gather information that will allow a segmentation approach to be applied. However, it is important that the segment groupings make sense to Scottish farmers. It must also be acknowledged that segment categorisation is largely subjective, and is not necessarily fixed.