Dairy farms in Japan have been requested to be equipped with facilities able to manage the livestock-excrement not later than the year 2004. As such farming is undertaken to meet consumer demand, this paper tests the possibility of shifting the cost onto milk consumers by assessing the conservation of natural environment from the milk consumers' point of view. The study measured consumers' willingness to pay for the conservation of natural environment in milk and additional willingness to pay, in the case of making the milk only from the dairy farms equipped with facilities to dispose the livestock-excrement. Data were collected from five regions: Obihiro, Hukui, Sapporo, Osaka, Tokyo, using a structured questionnaire. The results indicate that, first the average amount of Willingness To Pay for the environmental conservation of milk was 222.6 yen and compared to the market price, average AWTP was from 11.5 yen at the minimum to 37.7 yen at the maximum per liter. Second, regression analysis results showed that the respondents who have children, the level of milk purchased, knowledge about non-processed milk, knowledge about echo mark, participation in environmental organizations, cooperation in disposing of milk cartons for recycling work, income, and the difference between the willingness to pay for current milk and the real price of the milk(consumer surplus) had a significant effect on consumers' willingness to pay.
