Result-oriented agri-environmental schemes in Europe and their potential for promoting behavioural change

Abstract

Increasing interest is being shown in result-oriented agri-environmental schemes. Such schemes have the advantage of encouraging farmers to innovate to produce environmental goods – thus promoting the development of new skills and knowledge and, theoretically, ensuring that farmers are paid for provision rather than for performing management behaviours that may, or may not, lead to provision. In Europe a number of projects have trialled result-based payments over the last decade and calls for a stronger connection between agri-environmental payments and outcomes are growing. However, while the amount of information available on result-oriented schemes is increasing, there is currently no overview of the approach in the literature. This paper seeks to address this gap through a review of existing literature. It discusses why we might consider the use of result-oriented schemes, outlines two key ‘problem areas’ (the increased risk schemes represent to farmers, and the difficulties of developing and monitoring indicators), and, finally, proposes a framework for examining the strength of results orientation based on three dimensions – proportion of result-oriented payments, sensitivity of payments, and duration of schemes/payments. Although economic and ecological arguments are outlined, our focus in the analysis is on how the result-oriented approach is likely to institute cultural/social change, and how to optimise schemes to ensure cultural embeddedness.

Introduction

European agricultural policy has long relied on voluntary agri-environmental schemes as the instrument of choice to promote biodiversity, limit environmental degradation, reduce wildlife loss and preserve cultural landscapes. Voluntary approaches appeared initially in the form of a limited number of targeted schemes under Article 19 of the Farm Structures Regulations from 1987 to 1991 and, latterly, through the MacSharry reforms of 1992 which saw the widespread implementation of agri-environment measures (AEMs) under Council regulation 2078/92/EEC. Although schemes have come and gone in the last 20 years, the objectives of agri-environmental policy have remained largely unchanged, with the most recent Council regulation on rural development (1698/2005/EC) ensuring agri-environmental measures remain compulsory for the member states (EU Commission, 2005) and thus emphasising their continued importance in Europe.

Equally unchanged has been the chosen reward mechanism for farmers – that of ‘action-oriented’ payments, i.e. paying farmers not for the provision of outcomes, but the delivery of land management practices. In part, this is in deference to the signatories of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT, 1994) who required that measures needed to be taken to ensure that agri-environmental payments are not trade distorting. Thus two key criteria (Annex 2, Section 12), were established, namely:

• “Eligibility for such payments shall be determined as part of a clearly defined government environmental or conservation programme and be dependent on the fulfilment of specific conditions under the government programme, including conditions related to production methods or inputs”, and

• “The amount of payment shall be limited to the extra costs or loss of income involved in complying with the government programme” (GATT, 1994, p. 63).

These criteria have effectively governed the nature of agri-environmental schemes since their inception, enabling the European Union (EU) to pay farmers for environmental and conservation services where these are “dependent on the fulfilment of specific conditions” (including defining methods of production and inputs) and providing compensation is limited to costs of compliance incurred. With no alterations to the Agreement over the last 15 years, action-oriented approaches have become the dominant means of securing environmental and conservation public goods in Europe (Groth, 2009).

By some measures, the ‘action-oriented’ approach has been exceptionally successful. In 2009, 22% of the utilised agricultural area of the EU-27 was under an agri-environment agreement (European Network for Rural Development, 2011). However, while acceptance and uptake are used as indicators of effectiveness in regular EU reviews (Herzog et al., 2005) for almost a decade now concern has been expressed that this may not have been translated into other, arguably more important, scheme outcomes.

First, and fundamentally, there is the issue of the environmental benefits. While Beckmann et al. (2009) note that there are a diverse array of AEMs in place across the EU, and that the results have accordingly varied (also see Kleijn and Sutherland, 2003), many ecological examinations of action-oriented schemes have concluded that outcomes in terms of both targeted species protection and general biodiversity are often rather poor (Kleijn et al., 2001, Kleijn et al., 2004). For example, failure of action-oriented approaches has been noted with respect to the occurrence of hornworts on the Swiss Plateau (Bisang et al., 2009), butterflies and birds in Switzerland (Roth et al., 2008), farm birds in the United Kingdom (UK) (Berendse et al., 2004, Vickery et al., 2004), and biodiversity in general in Austria (Zechmeister et al., 2003, Wrbka et al., 2008). Where species restoration has been successful, schemes have been targeted at individual species, have been very costly, and have neglected other more common but also declining species (Berendse et al., 2004).

Second, there is some concern that AEMs may not be providing value for money (e.g. Green, 2004). Factors such as ‘adverse selection’ of lower yielding land for entry into environmental programmes (Quillérou and Fraser, 2010) and selection of options (from menu-type schemes) for ease of management rather than ecological objectives (Butler et al., 2010) suggest that currently we may not be getting the best environmental return for our investment.

Third, despite some researchers suggesting that action-oriented schemes should promote long-term attitudinal and cultural change (e.g. Lowe et al., 1999, Valentine et al., 2007), there is little evidence that they are doing so (Macdonald and Johnson, 2000, Schmitzberger et al., 2005, Herzon and Mikk, 2007, Schenk et al., 2007). The problem is effectively twofold. First, as Musters et al. (2001, p. 364) note, the practice of restricting farmers’ behaviour does little to foster commitment to nature conservation. In fact, restrictions on behaviour are often viewed with resentment and/or act as a disincentive for scheme participation (Wilson and Hart, 2001, Vickery et al., 2004). Second, as Deci et al. (1999, p. 659) note from a review of 128 experimental studies, providing extrinsic rewards for performing behaviours generally weakens intrinsic motivations rather than strengthening them. Thus providing monetary reward for performing set services may not induce the attitudinal or cultural change required for the necessary long-term behavioural changes (Burton and Paragahawewa, 2011).

It can be surmised that action-oriented approaches continue to dominate agri-environmental schemes for a number of reasons: they are relatively easy to implement and monitor (no complex indicators required), are, in general, acceptable to farmers (often because they involve little actual change to farming practices – e.g. Wilson and Hart, 2001), they comply with WTO requirements, and, to put it simply, we currently lack any feasible alternative.

However, since the mid-2000s the rhetoric emerging from the European Commission has begun to change. Under pressure from the World Trade Organisation, budgetary costs from the eastward expansion of the EU, and growing public expectations of transparent agricultural subsidies (Haaren and Bathke, 2008) the EU is looking for more cost-effective means of paying for agri-environmental provision. An option being seriously considered is the implementation of result-oriented schemes. For example, an assessment of 24 national rural networks and 12 EU organisations participating in the European Network for Rural Development, demonstrated a “fairly widely held view that the tools to maintain and enhance the environment should be more clearly results oriented” (ENRD and EC, 2010, p. 8). A November 2010 communication [COM(2010) 672] on future challenges in the food, natural resource and territorial areas pushed further in this direction in observing the “paramount importance” of developing new, more cost-effective, delivery mechanisms for environmental goods and noting that a more outcome-based approach “would best steer the policy towards EU priorities and show what it actually achieves” (ENRD and EC, 2010, p. 11).

To some extent this represents the increasing ideological intrusion of neoliberalism into European Union policy (e.g. Potter and Tilzey, 2005) with politicians contending that competitive market-mechanisms are the best way of delivering outcomes (including environmental outcomes) from strained European budgets.¹ Yet, it is also a recognition of the failure of action-oriented schemes to deliver as promised and of the consequent need to seek alternative approaches for providing environmental public goods.

Simultaneous to these developments have been the first tentative steps towards result-oriented schemes in the European Union. Besides the implementation of a roAEM in the MEKA programme in Baden-Württemberg in Germany and the addition of result-oriented elements such as bonus payments to action-based measures, much of this experimentation has been funded through regional programmes and, as a consequence, these schemes have not received the same level of EU funding (or assessment) as the EU co-funded action-oriented programmes. Nevertheless, in some parts of Europe experimentation with result-oriented payments has been applied: in particular, in the Netherlands (Verhulst et al., 2007, Musters et al., 2001) and some of the German Länder (States) where experimentation has been relatively extensive (e.g. Matzdorf et al., 2010, Wittig et al., 2006, Oppermann and Briemle, 2002) and has demonstrated that a level of results-orientation can be achieved within the existing policy framework. Given the ecological, economic and social failings of existing policy, combined with the liberalising political agenda within Europe, we contend that it is time to assess these schemes for their potential to improve the delivery of environmental public goods.

We are not proposing to outline a ‘methodology’ for constructing result-oriented schemes. Within the literature there already exist accounts of how to develop key programmes – in particular, the application of indicator-based result-oriented approaches to promote species-rich meadows has been thoroughly detailed (Matzdorf et al., 2008, Kaiser et al., 2010, Klimek et al., 2008, SNH, 2005, Buckingham et al., 1998) as have, to a lesser extent, animal species preservation programmes (Musters et al., 2001, Zabel and Holm-Müller, 2008). The economics of results oriented approaches have similarly been well discussed (e.g. Bräuer et al., 2006, Matzdorf and Lorenz, 2010, Hampicke, 2006, Groth, 2009, Zabel and Roe, 2009) and some researchers have begun to consider how result-orientation is likely to influence the extent to which scheme objectives become culturally embedded (e.g. Burton et al., 2008, Burton and Paragahawewa, 2011). However, what is lacking is an overview.

In this paper we first present a brief description of European result-oriented agri-environmental schemes. Second, we review the ecological, economic and social (in terms of scheme uptake and cultural embeddedness) outcomes emerging from these schemes. Third, we discuss two key problems with result-oriented approaches – increasing risk for farmers and the need to develop effective indicators. Finally, we present a framework for classifying the strength of the result-orientation based on three dimensions – proportion of result-oriented payments, sensitivity of payments, and duration of schemes/payments.