Farmers’ preferences toward an outcome‐based payment for ecosystem service scheme in Japan

Abstract

We estimate farmers’ preferences for outcome‐based (or results‐based) payment for ecosystem service scheme in Japan. To this end, we use a two‐stage stated preference approach—the first stage models farmers’ decisions to adopt outcome‐based contracts using a discrete choice experiment. The second stage estimates the areas of land which farmers who choose to participate will enrol in the scheme. Based on a sample of 333 respondents, our results show that most farmers are willing to participate in outcome‐based contacts. A variety of contract attributes are found to influence farmers’ decisions on participation. However, once a farmer decides to participate, their decision on how much farmland to enrol in is likely to be influenced solely by the per‐hectare payment. Therefore, to encourage more farmers to participate and enrol more farmland, policy‐makers’ decisions on the level of payments offered are critically important.

Using farmers' ex ante preferences to design agri‐environmental contracts: A systematic review

“…Currently, limited applied DCE research includes precise results‐based payments in their frameworks. In a few cases, these payments have involved predefined biodiversity targets expressed in species abundance (Sorice et al., 2011; Tanaka et al., 2022; Thiermann et al., 2023), yield projections (Waldman et al., 2017), success of tree‐planting activities (Schaafsma et al., 2019) or water quality improvements (Niskanen et al., 2021). There is abundant room for further progress in determining how farmers compare practice‐ and result‐based programmes once they truly have the option to select between the two.…”

“…Independent of the land use prescription, many other financial incentives are subject to the contract design for hypothetical policy schemes. This includes bonus payments (Vaissière et al., 2018), price premiums on agricultural products (Chang et al., 2017; Tanaka et al., 2022), access to credit (Kassahun et al., 2020), and payment distribution rules (Lliso et al., 2020).…”

Using Experiments to Design and Evaluate the CAP: Insights from an Expert Panel

“…One important issue related to the implementation of AES is related to their cost-effectiveness. In this respect a recent choice experiment measured farmers' preferences for participation in results-based payment schemes (Tanaka et al, 2022). Although conducted in Japan, the experiment is still informative in the EU context.…”

Comparing practice‐ and results‐based agri‐environmental schemes controlled by remote sensing: An application to olive groves in Spain

“…Salazar-Ordóñez et al (2021) focus on the use of a one-time bonus for environmental results (in terms of biodiversity and prevention of soil erosion), observing that farmers are largely indifferent to the inclusion of such a bonus (especially compared to other scheme attributes focusing on practices). Finally, Tanaka et al (2022) estimate farmers' preferences for rAES in Japan, focusing not only on attributes related to ecosystem services but also on contract implementation characteristics such as monitoring, technical assistance, and outcome certification. These authors find that most farmers are willing to participate in rAES and, once they have decided to participate, the quantity of farmland enrolled is only influenced by the per-hectare payment.…”

“…To the best of the authors' knowledge, there are no previous studies that analyse farmers' opinions of this monitoring system, in either rAES or pAES. In an attempt to reduce verification costs in rAES, Tanaka et al (2022) suggest involving farmers in outcome monitoring, finding that farmers would demand increased payments (compared to hiring external experts for the monitoring). The present paper aims to add to the few previous studies focusing on farmers' preferences for rAES, by providing deeper insights into the use of remote sensing-based monitoring systems, in addition to other attributes such as the level of ES provision and the type of ES monitored (biodiversity, carbon sequestration and both).…”