Assessment of willingness-to-pay for bio-based fertilisers among farmers and agricultural advisors in the EU

Abstract

Modern agricultural systems heavily depend on replenishing nutrients in the soils via mineral fertilisers. However, the extensive use and production of mineral fertilisers lead to adverse environmental effects. Furthermore, the raw materials used for the production of mineral fertilisers are unevenly distributed in the world and are susceptible to price fluctuations on the international market. A more circular solution is needed to ensure the sustainable supply of nutrients for agriculture in Europe. Bio-based fertilisers (i.e. fertilisers recycled from various waste streams while avoiding the use of fossil resources) can be a solution. The transition requires significant marketing efforts, but there is very little information on pricing preferences for newly developed bio-based fertilisers. This article aims to fill the gap by performing analyses of willingness-to-pay and price sensitivity using the Van Westendorp pricing technique and its extended version. Our analyses exemplified how the Van Westendorp methodologies can be used to generate insights into the price sensitivity of farmers and agricultural advisors in the EU. The selected methodologies allowed us to consider the ‘revenue vs. market share’ trade-off and thus distinguish the prices that are needed to gain the largest product market share and the prices that are needed to maximise the revenue from the products. Our results suggest that the price for a bio-based fertiliser at the 30–46% discount compared to the price of an equivalent mineral fertiliser would allow to maximise the market share of the product. Yet, to maximise the revenue the prices can be set equivalent to the ones of the mineral fertilisers. Combined with benchmarking studies and technical economic assessments our results contribute to the understanding of the key aspects needed for the development of marketing strategies and business case analyses for newly introduced products, such as bio-based fertilisers.