| Summary: | Sphagnum farming provides an alternative to detrimental peatland drainage in two ways. Firstly, Sphagnum mosses are cultivated on rewetted peatlands. Secondly, Sphagnum biomass is a high-quality growing media constituent suitable for replacing peat in horticulture. This study investigated the shift from drained bog grassland to a wet Sphagnum farming site from the micro-economic perspective. Based on five years of field experience, we calculated costs and revenues of Sphagnum farming for a total cultivation time of 20 years. Sensitivity analysis encompassed costs, yields, prices and the effect of public non-market payments. We found that cultivated Sphagnum biomass could not compete with peat at current market prices, whereas its use for orchid cultivation was economically viable in the case of medium to high Sphagnum productivity. Selling Sphagnum shoots as founder or “seeding” material was profitable even in pessimistic scenarios with high costs and low yields. Cost-covering prices for Sphagnum biomass substituting peat seem achievable, if end consumers pay a surcharge of 10 % for plants cultivated without using peat (peat free). A commercial-scale implementation, an increasing market demand for renewables, and setting climate targets for the agricultural and horticultural sectors will accelerate the development of Sphagnum farming as a profitable alternative to drainage-based peatland agriculture and peat extraction.
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