Agri-environmental schemes have been introduced in numerous countries to combat biodiversity loss in agrarian landscapes that are important for both food production and biodiversity. The successful operation of such schemes depends strongly upon trust between actors involved, as well as trust in institutions that govern these schemes. However, the interplay between interpersonal and institutional trust in the context of collective action for agri-environmental management is not well understood. To address this question, we explore the case of agri-environmental management in the province of Drenthe (in The Netherlands), where a new policy model was implemented. This case shows how both institutional design and institutional performance critically influence trust dynamics. Under the old policy model, farmers struggled with auditing and control, which fostered mistrust and hampered collective action. Under the new model, a landscape approach, more responsibilities were delegated to farmers, and more room was created for interaction, which fostered trust both between actors and in institutions. Based on our findings, we conclude that institutional designs that reflect trust in the actors can foster interpersonal and institutional trust that, in turn, facilitates collective action. However, old arrangements can also create path dependencies that limit trust development and impede collective action for agri-environmental management.Sustainability 2019, 11, 7022 2 of 18 agri-environmental policies are generally considered to be ineffective [2]. One of the main objections is that agri-environmental schemes are often too heavily based on management by individual farmers, while a collective landscape approach to conserve biodiversity that is carefully designed and targeted is required [1,2].The lack of effectiveness and the need for collective action at landscape-level were some of the most important reasons behind the reform of the Netherlands' agri-environmental policy in 2016. Under the subsequent new policy model, agri-environmental schemes can only be implemented via regional farmers' collectives. Through these collectives, farmers cooperate to achieve agri-environmental objectives at landscape-level. In the new model, the collectives incorporate agreements, to clarify which measures are adopted on which parcels of land to achieve the collective objectives. The Netherlands was not the only EU country that adopted agri-environmental schemes in which farmers' groups played a role, as such an approach became possible under the Common Agricultural Policy (CAP) of the European Union (2014-2020) as groups of farmers became eligible for CAP payments (EU regulation 1305/2013, article 35) [5].The new model, thus, aims to organise collective action in a particular area, rather than to pay individual farmers for adopting voluntary measures, each on their own land. The long-term performance of this new policy model depends, inter alia, upon the participation of a group of farmers. Studies have shown that the willingness to parti...