Whole farm considerations in the design of management agreements (original) (raw)
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Transaction costs in agri-environmental schemes: the principal-agent-point of view
2010
Agri-environmental schemes provide payments for farmers in return for environmental services. Their implementation induces transaction costs for administration and farmers. Although transaction costs became subject of research in recent years, little attention has been paid to activities which create them. This paper uses insights from Principal-Agent-Theory to show, how information gaps between contracting partners result in tradeoffs inducing activities conducted at implementation level. A Grassland Extensification Scheme, provided in Hesse, Germany, serves as a case-study. The paper shows that attempts and incentives to overcome informational gaps are different for administration and farmer. Further, attempts to reduce transaction costs of own activities may have spillover effects on the transaction costs of the contracting partner and along the transaction process. Those effects should be taken into account in discussions on scheme evaluation and development.
Land Use Policy, 2016
Most stakeholder-based research concerning agri-environmental schemes (AES) derives from work engaging with farmers and land managers. Consequently, the voices and opinions of other actors involved in AES tends to be unrepresented in the wider literature. One group of actors that seem particularly overlooked in this respect are private (independent) farm advisors (i.e., the consultants contracted by farmers and land managers to advise-on AES and agronomic matters). To begin to rectify this knowledge gap we developed an exploratory online survey to explore private farm advisor perspectives in the UK; specifically , the situation in England and advisors' experience of Natural England's Environmental Stewardship programme. A total of 251 Natural England registered farm advisors (29.9%) completed our survey. The majority of these had knowledge and expertise in relation to two (31.5%) or three (42.2%) Environmental Stewardship schemes, with proficiency in ELS (93.4%) and HLS (82.8%) being the most common. On average , advisors had 9.6 ± 5.6 yrs of experience and operated (75.3%) in a single region of England. Although our results concentrated upon a relatively simple set of initial topics of inquiry, the survey revealed a number of interesting findings. Firstly; for example, that in the opinion of the advisors working with farmers applying for Environmental Stewardship schemes, the 'knowledge-exchange encounter' occurring between themselves, their clients and Natural England is fundamental to the environmental effectiveness of these schemes as well as their farm business compatibility. Secondly, respondents suggested that beneath this 'encounter' lie tensions arising from the competing agendas and objectives of the different actors involved which can affect the content of agreements; for instance, farmer selection of management options versus Natural England's target environmental objectives. Farm advisors suggested that they had to negotiate this balance whilst also serving the needs of their clients. Thirdly, respondents raised issues concerning the complicated nature of scheme arrangements, both from their own and farmers' perspectives , as well as the adequacy of payments to cover input costs and matters regarding contractual compliance, all of which theyproposed affected farmer participation. Looking ahead, we believe that future AES should account for all of these issues in their design to aid long-term farmer participation, effective agreement implementation and beneficial environmental management.
From words to deeds: enforcing farmers’ conservation cost-sharing commitments
Journal of Rural Studies, 2004
Compliance with many agri-environmental programs fails to meet expectations due to enforcement difficulties. One response has been devolution of enforcement rights and responsibilities to industry organisations. This kind of response is based on a belief that farmers cooperate more with their industry organisations than with government in ensuring compliance, both in terms of sanctioning one another's compliance and supporting their organisations in providing third-party sanctioning. A case study involving complementary use of qualitative and quantitative research methods was undertaken to assess this belief. The case involves farmers in the central-Murray region of New South Wales in Australia faced with potentially worsening problems of irrigation salinity and waterlogging. Their jointly owned irrigation company has been devolved responsibility for enforcing implementation of collective action plans the farmers have developed and agreed to carry out. The case study revealed inter alia that the farmers are more prepared to support sanctioning from their company than they would be from government, but that-at least at this early stage of the implementation process-they remain reluctant to directly punish one another's non-compliance through peer pressure or other informal mechanisms. r
Co-benefits and trade-offs between agriculture and conservation: A case study in Northern Australia
Biological Conservation, 2015
On-farm conservation programmes require land managers to pursue both market and non-market objectives. If one can identify objectives that are complementary (co-benefits) and competitive (trade-offs) so that co-benefits can be pursued and trade-offs avoided, one may be able to lower the costs to land managers of on-farm conservation programmes. We used data from farms in northern Australia to identify potential trade-offs and co-benefits between market and non-market objectives. We used Data Envelopment Analysis (DEA) to assess the relationship between farm ‘inputs’ (e.g. land, labour, capital) and both market and non-market ‘outputs’ (used interchangeably with ‘outcomes’) (e.g. value of on-farm production, turtle biodiversity). The DEA analysis generated an ‘efficiency score’ for each farm; the best scores were associated with farms that used fewest inputs and had the ‘best’ outcome(s). We then looked for statistically significant relationships between those scores and other variables known to influence outcomes. After controlling for biophysical factors (e.g. rainfall, soil type), we found little evidence of trade-offs between market and non-market outcomes. We found that farms with many weeds had poor market efficiency scores, suggesting that weed-reduction programmes could generate substantive co-benefits for agriculture and biodiversity. Properties managed by people who preferred a small steady income (over a large uncertain income) had higher non-market efficiency scores, suggesting a link between conservation and attitudes to risk. Our results also suggest that encouraging on-farm agricultural diversification, the adoption of environmentally focused land-management plans, and a generally more positive attitude towards conservation could improve environmental outcomes without compromising market outcomes.
Biotechnology Progress - BIOTECHNOL PROGR, 2005
Proposals of the European Commission stress the future importance of agri-environmental payments within the rural development policy of the European Union. The aim of this paper is to present and discuss a model for choice for plant species protection contracts in the Netherlands. The model includes transaction costs, time and the possibility of lock-in situations related to contract choice. The approach discussed is flexible because it makes it possible to introduce all kinds of technical and institutional restrictions (differences in contract design).
Land Use Policy
Effectiveness of Agri-Environmental Schemes (AESs) as tools to enhance the rural environment can be achieved not only by increasing uptake rates, but also by avoiding participating farmers abandoning the scheme once they are in. For this reason, it is important to also consider what affects farmers' decisions to remain in the scheme rather than leave it at the end of the contractual obligation. However, up to now, there has been very little on this issue in the literature. The paper offers a contribution to this by revealing the role of determinants like the farmer's and farm structural characteristics, farmer's learning process, neighbourhood effect and the impact of changes in the policy design on the farmer's decision to remain in the scheme over a long time scale. This is examined in a long-standing scheme in the case study area, the Veneto Region of Italy. The paper uses duration analysis and is based on longitudinal panel-data of the entire population of 2000-2015 adopters. By using only data available in official regional records, it also provides regional policy-makers with an operational tool that is useful to analyse the impact of their AES design changes. The results of the duration models show that a larger farm size, a younger farmer age, the succession in the family farm, and the farmer's positive attitude towards the environment, trigger longer durations in AES. Similarly, the impact of the accumulation of the farmer's experience in the scheme management, as well as the neighbourhood effect increase the probability of remaining. Lastly, the changes in policy tailoring and targeting also have a positive impact on maintaining the farmer in the scheme. The paper concludes by noting that duration analysis can deliver useful results in order to guide policymakers in the effort to steer higher levels of farmers' persistence in the scheme and provides some recommendations for a more mature agro-environmental policy design.
Farm business pathways under agri-environmental policies: Lessons for policy design
Estudos Sociedade e Agricultura, 2015
European farmers have been adopting different practices in response to the Common Agricultural Policy (CAP). One of the new features of the CAP is the effort to encourage multifunctional farming systems which, besides food, also deliver environmental goods and services. The key policy instruments promoting environmentally-oriented farming are cross-compliance and greening, included as prerequisites for accessing the CAP direct payments, and agri-environment schemes (AES) provided as an optional additional program. In this study we examine how farmers have been coping with the CAP and its implications in terms of farm pathway dependence. The results reveal that intensive farmers adhere to cross-compliance and are exploring the possibilities for complying with greening in order to access the direct payments integrally, but either do not accesses or access the basic (entry) level of the AES in order to avoid taking land out of production. Extensive farmers easily comply with cross-comp...
Farmers’ perceptions, preferences, and propositions for result-oriented measures in mountain farming
Land Use Policy, 2018
Throughout the last decades, both reactive and proactive incentive policies have been developed to support farmers implementing environmental and biodiversity friendly management practices. More recently, however, result-oriented agri-environment measures have also been designed, where farmers are remunerated based on the achievement of certain results (e.g. a specific number of plant species on grasslands) and not solely on the implementation of defined management practices. We analysed this specifically in the context of mountainous farming in different Alpine countries. We carried out 79 interviews with farmers in different case study regions in Germany, France, Austria, Italy, and Switzerland. They included also details regarding farmland and biodiversity management, as well as the farmers' perceptions of and involvement in result-oriented measures. Lastly, we asked farmers to suggest new future measures. Many of the farmers interviewed already engaged in agri-environment measures contracts, with a subset using result-oriented contracts. Farmer motivations to become involved with contracts included economic benefits and environmental preservation. Despite perceived constraints in the implementation of result-oriented measures, many farmers would prefer this approach, as it is seen as easier to implement and provides more flexibility to adapt its use to the specific conditions of their farm. In relation to biodiversity management, while many farmers would favour different types of grassland management measures to improve diversity of wild plants and animals (domesticated breeds and wild animals) on the farm, they experienced difficulty in articulating own suggestions for result-oriented measures. Our study shows that the result-oriented approach is an attractive option for many farmers, but a strong need for advice, support, or training would be necessary to implement such measures at a wider scale. Directive, and Natura 2000 (Habitats Directive and Birds Directive), as well as various measures under the second pillar of the Common Agricultural Policy. For the latter, the last decades have seen the inclusion of agri-environment measures (AEMs), more recently referred to as agri-climate-environment measures under the new Common Agricultural Policy. We keep the measures in this manuscript with the term AEM as it was the term used throughout the duration of this research. These measures are action-oriented, meaning that the farmer is reimbursed for the extra costs or the losses induced by the implementation of a certain action, e.g. applying less fertilisers, diversifying crop rotations, following rules on cutting times and frequency on
Land Use Policy, 2013
In this paper, the objective is to assess the influence of the institutional organisation of AESs on farmers' participation in the schemes. The literature reveals that the institutional organisation of AESs can influence participation in the schemes and that this participation rate is an important indicator of the schemes' eventual environmental effectiveness. The paper describes several alternative ways to design and implement AESs, and two study regions were chosen in which several of these alternatives have been applied in practice: the region of Flanders, in Belgium; and the state of Arkansas, in the US. On the basis of the results obtained one could argue that farmers are generally more in favour of a flexible approach towards AESs, in which they have the freedom to decide on contract terms and the related payment. However, although this could have a positive effect on the environmental effectiveness of the schemes, it could also significantly increase the transaction costs.
Policies aimed at overcoming impediments to the implementation of on-farm conservation activities
Bioecon workshop, 2003
In Australia, off-reserve (on-farm) biodiversity conservation is an important component of ecological sustainable management and development. Policies for biodiversity conservation must consider that sub-optimal levels of on-farm conservation may occur if the net private benefits of on-farm conservation are less than the net social benefits. Research into factors affecting the private costs and benefits of on-farm biodiversity conservation, and into the capacity of policy to influence those factors may thus has much to offer to influence design of effective and efficient policy for biodiversity conservation. This paper makes an empirical contribution to these issues, using data from a survey of landholders in the Burdekin Dry Tropics region in north-east Queensland, Australia. After providing some background information about conservation policy in Australia and in the Burdekin Dry Tropics, it explores the empirical links between (a) on-farm conservation practices and the socio-economic characteristics of landholders; (b) on-farm conservation practices and perceived impediments to adoption; and (c) landholder attitudes to policy instruments and perceived impediments to adoption. It then considers the policy implications of the analysis.