‘Milk is Milk’: Organic Dairy Adoption Decisions and Bounded Rationality

Abstract

"Bounded rationality is an especially appropriate framework for organic dairy adoption decisions as it recognizes internal and external constraints which are critical in understanding complex farm decision making. Farmers use of, and access to, information is examined using interview data gathered from organic, conventional, managed graziers, and Amish dairy farmers in Southwestern Wisconsin at a time when organic milk prices offered a 50% premium over conventional prices. Focusing on certain aspects and impressions of organic dairy, such as the sentiment that 'milk is milk', may lead to information satisficing where farmers do not take full advantage of the information available to them. Organic farmer interviews reveal the challenges they faced with bounded rationality constraints and how they countered these challenges with the help of social networks, as well as how situational factors such as economic and health crises may have motivated them to adopt organic dairy. The interview data from organic and conventional farmers alike also reveals how many conventional dairy farmers utilized information strategies which did not fully consider the pros and cons of the organic system. A bounded rationality framework could enlighten policy makers and educators as they tailor sustainable agricultural policy design and information dissemination strategies to serve the diversity of farmers on the landscape."