Consumers' willingness-to-pay for perennial grass conversion to renewable energy in South-Central Minnesota.

Abstract

There has been an interest in growing perennial grass on marginal croplands to provide electricity and recreational services in the Madelia, Minnesota region. Policymakers and landowners want to know if it is economically feasible for farmers to convert row crops, such as corn and soybean, to perennial crops since the conversion will only take place only under the right economic conditions. A questionnaire was completed by 725 Carver, Dakota, and Scott county residents, which gave a response rate of 29 percent, to determine how much they would be willing-to-pay (WTP) to utilize the recreational services at a converted site. Using the contingent valuation and hypothetical trip cost models, some support exists for the perennial grass conversion. However, 52 percent would not be willing-to-pay for the conversion, and 64 percent would not visit the converted land. Using the estimated WTP amount from the contingent valuation model, calculations were performed to determine the total benefits a farmer would receive from converting to a perennial grass crop. In most cases, a farmer growing corn and soybean crops would not convert due to the higher revenue earned from growing corn and soybean, with rotation. However, the farmer will convert to perennial crops if unlimited credit stacking, or payments for multiple ecological benefits, are allowed.