Farm-level constraints on agri-environmental scheme participation: a transactional perspective

Voluntary agri-environmental schemes based on management agreements characterise much agri-environmental policy across the EU at present, and have expanded following the implementation of Regulation 2078/92 in all member states. Schemes generally motivate individual farmers to contract with government agencies to produce countryside goods in return for compensatory payments. Hence, farmers’ decisions to participate are central to achieving policy objectives. An enhanced understanding of farmers’ attitudes to and perceptions of schemes and their implementation would be of value for policy development. Recent transactions-cost research has observed that such schemes involve potentially heavy transactions costs, for both the state and farmers. In addition to reducing scheme cost-effectiveness, the transactions costs incurred by farmers can form a significant constraint on participation in schemes, with adverse effects on the supply of conservation goods. This paper considers behavioural and transactional perspectives on scheme participation. Some new data on the transactional burdens experienced by farmers when participating in schemes is examined from the perspective of identifying ways to improve policy transacting to ease constraints on participation where these exist. At the level of the individual participant, the development of agri-environmental one-stop-shops in member states for all schemes would allow transactions-cost economies, saving on the overhead costs of applying to different schemes with different objectives, as well as allowing a more integrated, less confused approach to participation. The longer-term value of farmer networks and capacity-building for agri-environmental management is important too.