FACTORS INFLUENCING INVESTMENTS IN ENVIRONMENTAL SOUND AND ENERGY SAVING TECHNOLOGIES BY GLASSHOUSE GROWERS

Abstract

Energy is an important production factor in glasshouse horticulture. However in recent years glasshouse growers are faced with increasing energy prices and growing environmental concerns. In 2000 the Flemish government decided to stimulate environmentally sound investments by means of investment subsidies. In the current research the factors influencing the adoption of environmentally sound and energy saving technologies by glasshouse growers are analysed. Based on the innovation diffusion theory the hypothesis is that external factors, personal characteristics of the firm manager (personal objectives, age, education level, importance attached to subsidies,...) and fixed characteristics (business objectives, business size, modernity,...) determine investment behaviour. Data for the research are obtained from accounting data and interviews at 58 holdings specialised in vegetable production and 79 holdings specialised in production of ornamental plants. These holdings all belong to the Farm Accountancy Data Network of the Centre of Agricultural Economics. PRINCALS and discriminant analysis are used to analyse the data. The most important investments are the conversion from fuel oil to natural gas and the installation or use of energy saving screens. An important obstacle to the conversion to natural gas, as determined by this study, is the lack of natural gas pipelines in the surroundings of the glasshouse holding. The holdings which currently use natural gas are mainly large, energy-intensive businesses with younger managers. Those who intend to change over to natural gas attach a great importance to investment subsidies as they have smaller but growth-oriented business. Investments in energy saving screens are important for producers of energy intensive ornamental plants. In most of the cases these investments consist of replacement of the existing energy saving screens with more efficient ones.