Agri-environment contract adoption under fixed and variable compliance costs

Abstract

This paper analyses the heterogeneity of compliance costs on farmers' choices to participate in agri-environment schemes. The theoretical distinction between fixed and variable costs is used to explain why factors that determine participation may differ from those which determine how much land participants enrol in a scheme. The level of fixed costs may explain why the smallest farms tend to be least likely to participate in such schemes. The empirical analysis presented in the paper compares models estimated with and without the hypothesis of negligible fixed costs. It also discusses the situation where the nature of costs can be identified and isolated. The results show that in the presence of fixed compliance costs, fixed transaction costs are a significant contracting barrier for smallest farms.agri-environmental contract, willingness to accept, fixed compliance costs,

Heterogeneity of farmers' preferences towards agri-environmental schemes across different agricultural subsystems

“…Also, the interaction ASCSQ×No-Training is positive in ROGi and IOGi-ROG, indicating that ROG and IOG farmers who have not undergone professional agricultural training are less willing to participate in AES. This result coincides with that found by Ducos, Dupraz, and Bonnieux (2009) for a number of EU countries.…”

“…First, it must be noted that there is no consensus in the specialised literature with regards to this issue (Defrancesco et al 2008). Although works that found a positive relationship between farm size and the adoption of AES are more common (Falconer 2000;Ducos, Dupraz, and Bonnieux 2009;Ruto and Garrod 2009), there are also works that reported either no relationship or a negative relationship between them (Defrancesco et al 2008;Espinosa-Goded, Barreiro-Hurlé, and Ruto 2010). Interestingly, our results partly support both findings.…”

“…Results indicate that MOG farmers would participate in these schemesindividually and collectively -in return for a statistically significantly lower payment than IOG and ROG farmers, with the latter showing the significantly highest payments for doing so. These results are in line with the general idea of higher (lower) AES uptake by extensive (intensive) agricultural systems highlighted by the literature (Wynn, Crabtree, and Potts 2001;Defrancesco et al 2008;Ducos, Dupraz, and Bonnieux 2009;Hynes and Garvey 2009). This is particularly pertinent to the most extensive sub-system (MOG) as opposed to the other two sub-systems.…”

How Local Intermediaries Improve the Effectiveness of Public Payment for Ecosystem Services Programs: The Role of Networks and Agri-Environmental Assistance

“…Intermediaries with functioning networks have therefore been assumed to exhibit the potential to further improve the environmental effectiveness of PES implementation by providing agri-environmental information and assistance to farmers [23]. The provision of these services before, during, and after PES application processes is generally found to influence farmers' participation positively, not least because it reduces private transaction costs and impacts farmers' attitudes towards PES and willingness to implement PES [36,38,39,42]. Furthermore, if intermediaries provide agri-environmental information and assistance deliberately, it helps to adopt a spatial targeting approach of PES.…”

“…Correspondingly, intermediaries providing such networks and competencies are, firstly, likely to influence farmers' attitudes and perceptions towards nature conservation and PES as well as their willingness to participate in PES [23,35], which have been identified as important drivers influencing farmers' participation within PES schemes [36][37][38][39][40][41]. Secondly, intermediaries providing for well-functioning local networks commonly have access to broader sources of information and can better diffuse information at relatively low costs [26].…”