Lincoln University Digital Thesis      Copyright Statement  The digital copy of this thesis is protected by the Copyright Act 1994 (New Zealand).  This thesis may be consulted by you, provided you comply with the provisions of the Act  and the following conditions of use:   you will use the copy only for the purposes of research or private study    you will recognise the author's right to be identified as the author of the thesis and  due acknowledgement will be made to the author where appropriate    you will obtain the author's permission before publishing any material from the  thesis. Innovation adoption and farm management practices in the Canterbury dairy industry A thesis submitted in partial fulfilment of the requirements for the Degree of Master of Commerce (Agricultural) at Lincoln University by Aiden Murphy Lincoln University 2014 Abstract of a thesis submitted in partial fulfilment of the requirements for the Degree of Master of Commerce (Agricultural). Abstract Innovation adoption and farm management practices in the Canterbury dairy industry by Aiden Murphy This research examined technology adoption behaviours of Canterbury (New Zealand) dairy farmers and the socio-demographic, farm and information seeking characteristics (ISCs) associated with adoption. Ten farm management practices (FMPs) were selected based on their adoption and promotion by the Lincoln University Dairy Farm (LUDF) which is a commercially orientated demonstration farm. An email-based electronic questionnaire collected quantitative and qualitative data from Canterbury dairy farmers identified as holders of dairy effluent discharge consents. The questionnaire was distributed to 647 farmers for whom valid email addresses were available (64% of all consent holders). The response rate was 22%. Data was analysed using SPSS20. Respondent ages ranged from less than 30 years to greater than 70 years and averaged 47 years. This compares to average farmer ages of 50 and 58 reported in 2012 media. Nearly half of respondents had greater than 20 years of industry experience and 52% had multiple farm interests compared with a New Zealand wide estimate of 20% reported by van Bysterveldt in 2012. Sixty six per cent of respondents had post-school education compared to 38% of Canterbury adults reported by Statistics New Zealand. Seventy nine per cent of respondents were farm owners/owner-operators and 12% were equity managers. Average farm size was 231 effective hectares compared to an average Canterbury dairy farm of 226 hectares reported by LIC and DairyNZ in 2012. Average milksolids production of 433 kg per cow and 1538 kg per effective hectare were 9% and 13% higher respectively than Canterbury averages reported by LIC and DairyNZ in 2012. Seventy five per cent of respondent farmers were producing more than 1400 kg milksolids per hectare compared to average Canterbury production of 1360kg. Ninety two per cent of respondents operate a moderate input farming system (DairyNZ System 2-4). ii Eighty five per cent of respondents visited the SIDDC/LUDF website and 51% attended LUDF focus days at least once in 2012. DairyNZ events were attended by 80% of respondents and 65% employed a private consultant/advisor. Respondents ranked the LUDF website, dairy newspapers and LUDF focus days as the most important information sources for learning about the LUDF’s results, and ranked demonstration farms, DairyNZ events and other farmers as the most useful information sources for learning about new agricultural innovations. The adoption level for individual FMPs ranged from 21-83% per cent. Adoption levels in descending order were: low and consistent grazing residuals (83%), re-grassing based on measurement of poor performing paddocks (81%), regular monitoring of cow body condition and responding with alternative management to achieve targets (71%), monitoring of soil moisture to drive irrigation practice (64%), creating a separate herd of young cows to enable preferential stock management to achieve targets (57%), pre-grazing mowing to lift animal intake (42%), a zero induction policy (40%), frequent small applications of nitrogen fertiliser and gibberellic acid simultaneously to promote production of high quality pasture (39%), use of Eco-nTM to mitigate urine nitrogen loss (33%), and synchronising of heifers to calve two weeks before the herd (21%). In general, adoption behaviour in relation to specific FMPs correlated poorly with other FMPs, indicating that each adoption is a specific decision rather than as part of an adoption package. Respondents’ comments indicated that non-adoption was typically a considered decision in relation to their specific FMPs and farming systems, rather than being the result of barriers such as unawareness, poor information or low education. A measure of innovativeness was constructed using the number of innovations adopted by each farmer. The level of explanation provided by socio-economic characteristics was weak, as was the association with ISCs. There was some evidence of farm size and higher production per cow and per hectare being associated with the number of innovations adopted. It is concluded that for this group of farmers, with generally high education and typically above average production per hectare, that the high variation in innovation adoption practices is very weakly associated with socio-demographics and ISCs, but is instead influenced by the relevance of an innovation based on its compatibility with farmers’ needs, their capacity to adopt, and their existing FMPs. This has implications for extension professionals, policy makers, and innovation adoption theory. Keywords: Farm management practices, dairy farmers, innovation adoption, Canterbury, New Zealand, socio-demographic characteristics, farm characteristics, information seeking characteristics iii Acknowledgements This thesis is the product of many peoples’ hard work, both directly and indirectly. I wish to thank all of the dairy farmers who participated in this research; I know that completing on-line surveys is not always top of the to-do list! I also wish to thank all of the farming families and friends I have worked with here in New Zealand over the past five years, especially the Topham and Lord families in Southland, the Ross and Lambe families in North Otago and the Cothrell and Mehrtens families in North Canterbury. Your hospitality, generosity and openness are humbling, thank you for a wonderful practical education in New Zealand dairy farming. I am truly indebted to my supervisors Dr Kevin Old, Dr Marv Pangborn and Professor Keith Woodford. Their guidance and wisdom has moulded this thesis, and made for a very memorable and educational postgraduate experience. I would also like to thank Associate Professor Michael Lyne for his help. Special thanks also go to all of the staff of the Department of Agricultural Management and Property Studies in Orchard Hall, to the ladies in Commerce administration and to fellow student Alice Sterritt, for their help and support. I am also very grateful for the companionship and patience of Beckie Mehrtens. Thank you to my parents and family in Ireland, and siblings in the USA, Singapore and here in New Zealand for their encouragement. Growing up in a large family on a small dairy farm in Ireland made for many great experiences and I wish to thank my mother and father for teaching us about what really matters in life; health, happiness and hard work. Finally, the scholarships awarded by the Centre of Excellence in Farm Business Management and the South Island Dairy Development Centre are gratefully acknowledged. iv Table of contents Abstract ....................................................................................................................................... ii Acknowledgements ..................................................................................................................... iv Table of contents .......................................................................................................................... v List of tables .............................................................................................................................. viii List of figures ................................................................................................................................ x Chapter 1 Introduction ................................................................................................................. 1 1.1 Preview .......................................................................................................................................... 1 1.2 Innovation, innovation adoption and FMP innovations ................................................................ 2 1.3 Research background ..................................................................................................................... 3 1.4 Research aim .................................................................................................................................. 5 Chapter 2 Innovation adoption literature ...................................................................................... 6 2.1 Introduction ................................................................................................................................... 6 2.2 Relevant innovation adoption research ......................................................................................... 6 2.3 The innovation adoption literature ............................................................................................. 10 2.4 Theoretical frameworks relevant to FMP innovation adoption .................................................. 11 2.4.1 Agricultural extension theory ......................................................................................... 11 2.4.2 Diffusion of innovations theory ...................................................................................... 12 2.4.3 Consumer behaviour theory ........................................................................................... 19 2.4.4 Bounded rationality theory ............................................................................................. 21 2.4.5 Theory of reasoned action and the theory of planned behaviour .................................. 22 2.5 Theoretical framework for this research ..................................................................................... 24 2.6 Empirical research findings on innovation adoption in agriculture ............................................. 26 2.7 The influence of socio-demographics on innovation adoption ................................................... 30 2.8 Summary of the literature review ................................................................................................ 32 2.9 Knowledge gap ............................................................................................................................. 32 2.10 Research questions ...................................................................................................................... 33 Chapter 3 Research methodology and methods ........................................................................... 34 3.1 Introduction ................................................................................................................................. 34 3.2 Philosophical assumptions ........................................................................................................... 34 3.3 Research approach ...................................................................................................................... 34 3.4 Method of data collection ........................................................................................................... 35 3.4.1 Farmer questionnaire background ................................................................................. 35 3.4.2 Questionnaire format and content ................................................................................. 36 3.4.3 Sample selection ............................................................................................................. 37 3.4.4 Distribution of the electronic questionnaire .................................................................. 37 3.5 Data analysis ................................................................................................................................ 38 3.5.1 Survey data...................................................................................................................... 38 3.5.2 Variable types included in the analysis ........................................................................... 38 3.5.3 Statistics used in data analysis ........................................................................................ 40 3.6 Summary ...................................................................................................................................... 44 v Chapter 4 Results ........................................................................................................................ 46 4.1 Introduction ................................................................................................................................. 46 4.2 Univariate analysis of survey data ............................................................................................... 46 4.2.1 Canterbury dairy farmer characteristics ......................................................................... 46 4.2.2 Canterbury dairy farm characteristics ............................................................................ 47 4.2.3 Canterbury dairy farmer ISCs .......................................................................................... 52 4.3 Bivariate analysis of survey data .................................................................................................. 58 4.3.1 Introduction .................................................................................................................... 58 4.3.2 Canterbury dairy farmer characteristics ......................................................................... 58 4.3.3 Canterbury dairy farm characteristics ............................................................................ 60 4.3.4 Canterbury dairy farmer ISCs .......................................................................................... 62 4.3.5 Correlations between Canterbury dairy farmers and their dairy farms ......................... 65 4.3.6 Correlations between dairy farmers, dairy farms and farmers’ ISCs .............................. 66 4.4 Innovation Adoption .................................................................................................................... 70 4.4.1 Introduction .................................................................................................................... 70 4.4.2 Rate of FMP innovation adoption in the CDI .................................................................. 71 4.4.3 Correlations between the adoption of individual FMP innovations ............................... 78 4.4.4 Correlations between farmers, farms and ISCs, and the adoption of individual FMP innovations ...................................................................................................................... 79 4.4.5 Number of FMP innovations adopted (farmer innovativeness) ..................................... 91 4.5 Chapter summary ........................................................................................................................ 96 4.5.1 Farmer socio-demographic characteristics ..................................................................... 97 4.5.2 Farmer ISCs ..................................................................................................................... 98 4.5.3 Innovation adoption in the CDI ....................................................................................... 99 4.5.4 Farmer characteristics and innovation adoption ............................................................ 99 4.5.5 Farm characteristics and innovation adoption ............................................................. 100 4.5.6 Farmer ISCs and innovation adoption ........................................................................... 100 4.5.7 The number of innovations adopted (farmer innovativeness) ..................................... 103 4.5.8 Results from logistic and linear regession .................................................................... 103 Chapter 5 Discussion ..................................................................................................................105 5.1 Introduction ............................................................................................................................... 105 5.2 The major findings of this study ................................................................................................ 106 5.3 Canterbury dairy farmer respondents ....................................................................................... 106 5.4 Farmer characteristics and innovation adoption ....................................................................... 107 5.5 Farm characteristics and innovation adoption .......................................................................... 108 5.6 Farmer ISCs and innovation adoption........................................................................................ 110 5.7 Innovation adoption in the CDI .................................................................................................. 112 5.8 Contribution of this study .......................................................................................................... 115 5.9 Practical implications ................................................................................................................. 117 5.10 Limitations of findings ................................................................................................................ 118 5.11 Future research suggestions ...................................................................................................... 118 5.12 Conclusions ................................................................................................................................ 119 Appendix A Lincoln University Human Ethics Committee approval ..............................................120 Appendix B LUDF 2012 online questionnaire ..............................................................................121 Appendix C Conversion table from τ to r values ..........................................................................131 vi Appendix D Cross tabulations of the significant correlations between farmer, farm and information seeking characteristics ............................................................................................132 D.1 Cross tabulation of farmer characteristics ................................................................................. 132 D.2 Cross tabulation of farm characteristics .................................................................................... 135 D.3 Cross tabulation of farmer x farm characteristics ..................................................................... 138 D.4 Cross tabulation of ISCs ............................................................................................................. 139 D.5 Cross tabulation of farmer socio-demographics x farmer ISCs.................................................. 144 Appendix E Cross tabulations of the significant correlations associated with the adoption of individual FMP innovations ........................................................................................................149 E.1 Cross tabulations between the adoptions of individual FMPs innovations .............................. 149 E.2 Cross tabulations of farmer characteristics x adoption of individual FMP innovations ............ 154 E.3 Cross tabulations between farm characteristics and adoption of individual FMP innovations 156 E.4 Cross tabulations between farmer ISCs and the adoption of individual FMP innovations ....... 158 Appendix F Details of variable transformations ..........................................................................166 F.1 Details of farmer variable transformation ................................................................................. 166 F.2 Details of farm variable transformation .................................................................................... 167 F.3 Details of farmer ISC variable transformation ........................................................................... 169 F.4 Details of innovation adoption variables ................................................................................... 170 Appendix G Results of secondary data analysis ...........................................................................171 Appendix H Results of logistic regression analysis .......................................................................187 References ............................................................................................................................... 191 vii List of tables Table 1.1 New Zealand and Canterbury dairy industry figures (Adapted from LIC, 2000; LIC & DairyNZ, 2012) ..................................................................................................................... 4 Table 2.1 Consumer purchase behaviour (Adapted from Kaine, 2004, p. 3). ................................... 20 Table 2.2 Summary of empirical research findings on innovation adoption in agriculture .............. 29 Table 3.1 Descriptive statistics for the scale variables included in the data analysis ....................... 39 Table 3.2 Results of the Kolmogorov-Smirnov test for the scale variables ....................................... 40 Table 3.3 Effect sizes (Adapted from Morgan et al., 2007, p. 94; Walker, 2003, p. 526). ................ 41 Table 4.1 Position of person answering questions............................................................................ 46 Table 4.2 Numbers of years actively involved in dairy farming in New Zealand .............................. 47 Table 4.3 Size of milking platform 2011/12 season (effective ha) .................................................... 48 Table 4.4 Predominant breed of dairy cow in milking herd .............................................................. 48 Table 4.5 Farming systems (as defined by DairyNZ) for the past three seasons .............................. 49 Table 4.6 Milksolids production per cow 2011/12 season (kg to factory) ........................................ 49 Table 4.7 Milksolids production per ha 2011/12 season (kg to factory per effective ha) ................ 50 Table 4.8 Respondents mean stocking rate (cow per effective ha) .................................................. 51 Table 4.9 Dairy replacement young stock management................................................................... 51 Table 4.10 Farmers’ views of standoff facilities/partial housing for livestock .................................... 52 Table 4.11 Attendance at any of the four LUDF focus days in the past three seasons ....................... 53 Table 4.12 Reasons for attendance at LUDF focus days ..................................................................... 53 Table 4.13 Importance of different information sources for learning about LUDF results ................ 54 Table 4.14 Use of the SIDDC/LUDF website ........................................................................................ 54 Table 4.15 Importance of different sources for learning about new agricultural technology and innovation .......................................................................................................................... 55 Table 4.16 Attendance at DairyNZ events (excluding LUDF focus days) ............................................. 56 Table 4.17 Use of services provided by private consultants/advisors ................................................ 56 Table 4.18 Information communication with private consultants/advisors ....................................... 57 Table 4.19 Experience with obtaining relevant industry information ................................................ 57 Table 4.20 Correlation of farmer characteristics ................................................................................ 58 Table 4.21 Correlation of farm characteristics .................................................................................... 60 Table 4.22 Correlation of farmers’ information seeking characteristics ............................................. 62 Table 4.23 Correlation of sources of information used for learning ................................................... 64 Table 4.24 Correlation of farmer and farm characteristics ................................................................. 65 Table 4.25 Correlation of farmer characteristics and sources of information used ........................... 67 Table 4.26 Correlation of farm characteristics and sources of information used ............................... 69 Table 4.27 Levels of adoption of FMP innovations ............................................................................. 71 Table 4.28 Reasons for adopting/not adopting low and consistent grazing residuals ....................... 72 Table 4.29 Reasons for adopting/not adopting re-grassing based on measurement of poor performing paddocks ......................................................................................................... 72 Table 4.30 Reasons for adopting/not adopting regular monitoring of cow body condition and responding with alternative management to ensure targets are achieved ...................... 73 Table 4.31 Reasons for adopting/not adopting monitoring of soil moisture to drive irrigation practice .............................................................................................................................. 74 Table 4.32 Reasons for adopting/not adopting creating a separate herd of young cows .................. 74 Table 4.33 Reasons for adopting/not adopting pre-grazing mowing to lift animal intakes ............... 75 Table 4.34 Reasons for adopting/not adopting a zero induction policy ............................................. 75 Table 4.35 Reasons for adopting/not adopting frequent small application of nitrogen fertiliser and gibberellic acid simultaneously................................................................................... 76 Table 4.36 Reasons for adopting/not adopting Eco-NTM to mitigate urine nitrogen loss ................... 77 Table 4.37 Reasons for adopting/not adopting synchronisation of heifers to calve two weeks before herd ........................................................................................................................ 77 Table 4.38 Correlations between adoptions of individual FMP innovations ...................................... 78 viii Table 4.39 Correlations between farmer characteristics and the adoption of individual FMP innovations ........................................................................................................................ 80 Table 4.40 Correlations between farm characteristics and the adoption of individual FMP innovations ........................................................................................................................ 83 Table 4.41 Correlations between ISCs and the adoption of individual FMP innovations ................... 85 Table 4.42 Correlation between information sources used for learning about LUDF results and the adoption of individual FMP innovations ..................................................................... 87 Table 4.43 Correlation of information sources used for learning about new agricultural innovation, and the adoption of individual FMP innovations ........................................... 90 Table 4.44 Descriptive statistics for number of innovations adopted ................................................ 92 Table 4.45 Correlations between farmer characteristics and innovativeness .................................... 93 Table 4.46 Correlations between farm characteristics and innovativeness ....................................... 93 Table 4.47 Correlations between ISCs and innovativeness ................................................................. 94 Table 4.48 Correlations between the information sources used for learning about LUDF results and innovativeness ............................................................................................................ 95 Table 4.49 Correlations between the information sources used for learning about new agricultural technology and innovation and innovativeness ............................................ 95 Table 4.50 Linear regression results .................................................................................................... 96 ix