Willingness to collaborate in agriculture?  A behavioural experiment shows positive results

Willingness to collaborate in agriculture? A behavioural experiment shows positive results

(German version /deutsche Version)

Many environmental objectives in agriculture can be better achieved at larger spatial scales through cooperation among farmers. In the Netherlands agri- environmental measures are implemented exclusively within farmer collectives (“Dutch modell”), which develop regional management plans together with the authorities. In a behavioural experiment, we investigated German farmers’ willingness to collaborate with the aim to introduce such an approach to Germany.

The participants’ willingness to collaborate was high and exceeded the expectations of experts. These results provide first positive indications regarding the potential of collaborative Agri-environmental schemes (AES) in Germany.

Motivation and goals

There is great interest in the “Dutch approach” of collectively implementing Agri-environmental schemes (AES) , since many measures are more effective, when coordinated on a landscape scale, e.g. rewetting of peatlands, protection of habitats or erosion control. The  2019 report of the Scientific Advisory Council at the Federal Ministry of Food and Agriculture therefore also recommends: “(1) Examine the extent to which elements of the Dutch system of collective nature conservation arrangements could also be applicable in Germany; (2) improve the institutional prerequisites for the implementation of collective models of environmental and climate action; (3) in pilot projects in the current finance period, support the grouping of relevant local actors into ‘biodiversity-generating communities”.

However, little is known, about the willingness of farmers to collectively pursue environmental goals. We have investigated this basic willingness in a so-called public goods game.

The public goods game

The public goods game is a concept from game theory (theoretical framework within the field of economics). Players have an initial monetary endowment that must be divided between a private account and a group account. The money in the group account is multiplied by a number that is lower than the number of participants but greater than one. Thus, although it is in the interest of the group, players have no individual incentive to contribute to the group account, although this is in the interest of the group. The game can be used to abstractly study free-rider behaviour and cooperation. Thousands of laboratory experiments show that many people are willing to cooperate with strangers. A typical result is that participants contribute about half of their initial endowment to the group. The figure (above) shows an example with four players and an initial endowment of 10 euros.

The experiment and the survey of experts

public goods games have already been carried out in many different versions in the laboratory. In our study, we discussed a selection of possible treatments against the background of collaborative agri-environmental schemes at a workshop during the Green Week 2020 in Berlin. In addition to a baseline version, four treatment versions of the game were selected from 17 alternatives for a study with German farmers:

(1) Baseline: four participants must allocate 50 euros between a group account and a private account. The amount on the group account is doubled and divided equally among all players.

(2) Heterogeneous initial endowment: participants have either a high or a low initial endowment;

(3) Leading by example: three participants can first see the decision of the first player and only then make their decision;

(4) Social norm: participants receive the information that many other participants have contributed high amounts to the group account;

(5) Social optimum: participants receive the information that it is in the interest of the group that everyone contributes as much as possible to the group account.

More than 350 farmers participated in our online experiment. Participants were randomly presented with one of the five options. Every tenth participant received a real payment depending on his/her own behaviour and the behaviour of the other participants.

Parallel to the study with the farmers, we asked more than 200 experts from science and practice to predict the behaviour of the farmers in our experiment. Three participants were randomly selected and received a payment depending on the accuracy of their estimate.

Results

For each of the five treatments the figure shows in orange the distribution of the percentage that participants contributed to the group account. In all treatments the average is higher than 50% and, thus, higher than in typical laboratory experiments. The contributions do not differ between the treatments, with the only exception of the social optimum, where contributions are significantly higher and reach 80% of the initial endowment.

The distribution of experts’ predictions is shown in green. Experts underestimate the contributions of farmers by an average of more than twenty percentage points.

Diagram showing farmers' contributions to public good and expert predictions of farmers' contributions to the public good.

Figure 1 Distribution of contributions (orange) and expert predictions (green) Source: own calculations

First conclusions and outlook

The most important conclusion is that participating farmers show a high basic willingness to cooperate under experimental conditions. It has also been shown that experts assess the cooperation behaviour of the participants too pessimistically. In the Contracts2.0 project, we will now discuss these results with practice partners and gather insights into the potential of collaborative agri-environmental schemes and the so-called “Dutch model” in further studies. Among others, similar studies are planned in the Netherlands, Hungary and Poland. An English-language report describing this process is available for download:

Rommel, J., van Bussel, L., le Clech, S., Czajkowski, M., Höhler, J., Matzdorf, B., … & Zagórska, K. (2021). Environmental cooperation at Landscape Scales: First Insights from Co-Designing public goods Games with Farmers in Four EU Member States. https://pub.epsilon.slu.se/23419/

Innovation in the field: The Bornholm CIL visit farms to explore Carbon Farming

Innovation in the field: The Bornholm CIL visit farms to explore Carbon Farming

On May 26, the CIL of Bornholm arranged visits to farms practicing non-tillage faming, Conservation Agriculture and holistic grazing. Twelve participants, farmers, advisors, authorities and researchers, visited three farms to learn more on these practices in relation to Carbon Farming. The participating farmers, both hosts and others, were very enthusiastic about these farming practices in relation to reducing the impact of farming on climate and for making future farming on Bornholm more resilient to climate changes. However, when discussing trade with CO2-certificates as a tool to support the farmers economically in adopting these practices, the farmers were very skeptical. They identified six major reasons for not contracting reductions in emissions and increased storage of carbon in order to sell CO2-certificates:

  • The economic incentive is far too low with currently expected prices of certificates
  • The administrative work is too time-consuming
  • Long-term contracts limit the room to maneuver in the strategic management
  • The model-based calculation of certificates is not reliable
  • The reduced emissions and increased storage of Carbon should be kept in the farming sector
  • Uncertainty of fit of certificates with future changes in the subsidies and regulations

Simplicity is key for an attractive scheme

Instead, the farmers want simplicity. They would like to see non-tillage systems, Conservation Agriculture and holistic grazing acknowledged as practices contributing to climate-neutral and climate-resilient farming and included in a Carbon Farming eco-scheme in the next generation of support under the Common Agricultural Policy. A few ticks in the right boxes of the yearly application for support should be sufficient paperwork.

In need for fresh ideas

In the CIL of Bornholm, we had the idea of developing new innovative contracts as an add-on/extension to an existing scheme on CO2-certificates, improving and adding elements to increase the uptake and the outcomes in terms of climate impacts of the contracts. However, the farmers currently do not see contracts based on the sale of CO2-certificates as an option for funding farming practices contributing to the development towards a climate-neutral agriculture. Therefore, for the Bornholm CIL the next steps of the Carbon Farming track is currently unclear. Bottom-up innovation is challenging and not always a straightforward process. 

Written by Erling Anders (University of Copenhagen), Photo: © Vivi Granby

Exploring feasibility of novel approaches  – A Delphi study

Exploring feasibility of novel approaches – A Delphi study

The team from ESSRG, overseeing the policy work package in Contracts2.0, conducted a Delphi-survey to highlight limitations of the current agri-environmental schemes as well as to gauge the perception of innovative approaches for the delivery of public goods amongst policy makers, farmers/advisors, researchers and NGO’s across Europe.

The Delphi method is based on structured expert surveys and draws on experiences and knowledge of the participants in form of empirical, predictive and normative aspects. Its core concept is to facilitate discussions and develop consensual ideas among participants via several correlated rounds allowing experts to reconsider their opinion in each round.

It is planned to run altogether three rounds of the Delphi survey, to assess the knowledge base and to stimulate a discussion regarding the adoption of innovative contractual solutions for a farmer- and eco -friendly agriculture. The first round of the survey, conducted in March/April 2021, was completed by 41 stakeholders form 17 European countries. The aim was to first depict the limitations of current agri-environmental schemes, followed by an assessment of the knowledge base and experiences regarding the four novel approaches being at the heart of contracts2.0: results-based payments, collective action as well as value chain and land tenure approaches. In the following some of the results are summarized:

Limitations of the current schemes are evident

Regarding the limitations the results suggest, that financial (e.g. transaction cost, compensation vs. reward) and institutional (e.g. bureaucracy, lack of flexibility) factors are the most relevant. But knowledge-related aspects (e.g. lack of robust scientific evidence, limited access to advisory services) as well as the need for improved monitoring and regional differentiation were also mentioned as hindering an effective implementation of agri-environmental measures.

Results- vs. action-based payments

Concerning the innovative approaches, results-based payments were perceived as potentially (highly) effective in achieving the ecological objectives (especially biodiversity related) due to the agreement of clear and measurable outcomes. Respondents highlighted that rewarding farmers for their environmental performance (instead of compensating for their lost income or increased costs) contributes to the attractiveness of this approach. While the increased flexibility and autonomy for farmers are additional advantages, issues like monitoring (e.g. definition of robust indicators, use of IT or farmers expertise to bring down cost) and risk mitigation (uncertainty due to external factors) still pose a challenge and need some further attention when refining/adapting this approach. Many respondents state that setting up such schemes would require initially large investments (management, monitoring, trainings), which might serve as a barrier for the adoption. As a potential middle ground some experts suggest a combination of results-based payment as a bonus on top of an action-based implementation to reward more ambitious efforts.

Collective action

Many respondents agreed that the collective approach (or group contracts) can effectively deliver on the (mostly biodiversity related) objectives when adequate ecological expertise is involved. The main argument in favor of cooperation is the positive effect on the connectivity of habitats through a coordinated management of suitable measures on landscape scale. The decreased (real or perceived) transaction cost on the farmers’ side is another advantage. While some respondents argue a long-lived tradition with cooperation amongst farmers helps to succeed when collectively implementing measures, others highlight the importance of a feeling of trust within a collective and/or contractual elements for regulating individual behavior being the key factors for success. Regarding the transaction cost of the collective approach respondents acknowledge a shift from public transaction cost (administrations) to the private sector (mainly the collective itself or their management respectively).

Value chain approach

The value chain approach is well received by most respondents, since it seems well suited to reward farmers for their environmental performance, independently from public funding. The generation of income through an adequate market price is also more in line with farmers’ business logic (instead of relying on public funds). This approach seems to work well with shorter value chains and a more regionalized marketing, while large retailers do often not engage so easily in such programs. A key factor of this approach is the labeling of the extra effort to simplify the decision to purchase for the environmentally conscious customers. Given the already large variety of labels, special attention needs to be paid to a transparent and clear communication of the environmental performance throughout the value chain. Respondents recognize no significant (institutional, cultural or social) barriers to implement this approach, however it is perceived to require an extensive infrastructure and a broad knowledge base.

Land tenure contracts

The Land tenure approach is the one with the most uncertainty among the respondents, possibly due to a potential lack of experience with this type of contract. It could be a well-suited approach for large landowners, especially when intermediaries (National Parks, Church, NGO’s) are involved. The comparatively longer contract periods of land-tenure approaches not only contributes to the environmental effectiveness but also benefits the farmer by provided a sound and predictable financial base, where uncertainty and risks are comparatively low.

How does the ideal contract look like?

The last block of the survey addressed the question of the ideal contract. Interestingly the (assumed) most effective type of contracts across all respondents were by far the publicly funded agri-environmental scheme (AES). Regarding the characteristics of a contract the opinions differ a bit more. Bi-laterally agreed and publicly funded contracts with a flexible length and a mix of results- and action-based payments earned the highest approval rate. Although the results of this survey are far from being representative, the glimpse into the minds of different stakeholder groups involved with the discussion of agricultural policy issues, has provided us with some valuable insights. Especially the open-ended questions have generated a rich pool of ideas, to guide us on our path towards the development of contractual solutions that benefit farmers and nature. The third and last round of the Delphi will be completed in September 2021.

For a more detailed and comprehensive interpretation of the results check out this report.

Figure 2. Differences of the characteristics of the ideal contract according to the background of the respondents. Source: own compilation based on the 1st round of the Delphi survey.

UK farmers give positive feedback on results-based contracts

UK farmers give positive feedback on results-based contracts

Since 2016, results-based contracts have been trialled in two pilot areas in England – on hill farms in the Yorkshire Dales National Park and arable land in the lowlands of East Anglia. With monitoring data from four years of environmental performance and farmer attitudes, these pilot schemes provide a rich source of learning about the practical aspects, advantages and disadvantages of this novel contract approach.  DEFRA (Department for Environment, Food & Rural Affairs) recently renewed the contracts for a further year.  This new phase will see farmers co-designing new measures and exploring opportunities to expand results-based contracts across the farms.

The University of Aberdeen, together with Contracts2.0 action partner Natural England and the Yorkshire Dales National Park Authority, have recently surveyed participating farmers in the National Park to find out more about their views on key support mechanisms, barriers and management practices within the results-based scheme. They found that farmers welcomed the additional agency afforded by a results-based approach and recognised pragmatic benefits such as simplified paperwork and flexibility.  Participants appreciated good financial rewards for continuing or adapting sustainable management practices to maintain or improve habitat quality. Findings further indicate the perception among farmers that longer duration results-based contracts offer potential for greater improvements in habitat quality. Also, of great importance and value to the farmers has been the strong working relationships and consistent dialogue with the scheme’s administering bodies.

For more information of the trialled -results-based schemes check our partners Website: Results-Based Agri-environment Payment Scheme (RBAPS) pilot study in England – GOV.UK (www.gov.uk)

For more on results-based examples check out https://www.rbpnetwork.eu/

Written by Annabelle LePage(Natural England)

monitoring grassland
Visualizing the future of agriculture in the Dutch case studies

Visualizing the future of agriculture in the Dutch case studies

The Contract Innovation Labs in the Netherlands worked with an illustrator to produce a visual representation of the “dream farming landscape”, an imagined ideal future for the landscape and its agricultural landuse practices. This tool is used by the Innovation Labs to have a point of departure for identifying the changes that need to happen to make this vision a reality. In this blogpost, BoerenNatuur shares their experience with the process of developing a shared vision of the ideal future of farming.

Written by Lisa Deijl (BoerenNatuur)

Presenting the Dutch case: the collective contract

The Dutch case in Contracts2.0 is unique because it revolves around the only nation-wide fully implemented collective contract-model for nature conservation by farmers in the world. In the Netherlands, since 2016, this collective contract was set up by farmers and the national and provincial governments. Now, there are 40 collectives of 11.000 farmers who carry out this subsidy scheme for nature conservation. BoerenNatuur is the national umbrella organization of the 40 collectives, and the action partner in Contracts2.0. You can read more about what we do here

As an action partner we are excited to be able to have the opportunity to study, together with research partners from around Europe, how the collective contracts are working and what improvements can be made. These questions we aim to answer in the Contract Innovation Labs.

Setting up Contract Innovation Labs

Just like the other Contracts2.0 actionpartners in 9 European countries, BoerenNatuur established a Contract Innovation Lab in the Netherlands. The Dutch Innovation Lab gathers people that have expertise with this Contract model from working as a practitioner in the agricultural sector. In the case of our Labs, these are farmers and employees of the farmers collectives or nature organizations.  Because BoerenNatuur is the national umbrella organization of the 40 local collectives, we chose to organize not one but two Innovation Labs in order to get more insight in what different challenges the collective approach meets in different parts of the country. The Labs are located in Limburg (the south of the Netherlands, an area with varied land use and the biggest collective with the most budget and the most members) and in Oost-Groningen (the north of the Netherlands, an area with mostly arable agriculture and a smaller collective). To successfully set up the Innovation Labs within Contracts2.0 and engage local stakeholders, we received a great amount of help from the local collectives Natuurrijk Limburg (NaLi) and Agrarische Natuurvereniging Oost-Groningen (ANOG).

Visualizing the “dream farming landscape” in the Innovation Labs

The end goal of the work in Contracts2.0 Innovation Labs is to make policy suggestions for improved contracts. Formulating an ideal future for the farming landscape is a step towards this, as it helps to pinpoint the changes that stakeholders would like to see. But the process began with analysing the here and now: by carrying out a SWOT-analysis of the contracts under investigation. With all the strengths, weaknesses, opportunities and threats laid out, we had a basis to start imagining the ideal future, the “dream landscape”. It was a very interesting process to try to come up with a coherent view for the local landscape in 2040, especially since there were different actors involved. After a while we were able to come up with a description of the dream landscape in 300 words, that everyone felt comfortable with.

It was then that Lenny van Bussel, our research partner from Wageningen University, suggested that we hire an illustrator to visualize the text describing the agreed upon dream landscape features. We thought it would be a nice gesture to the local stakeholders, to have a tangible product from this project that they had been working on. However, when the picture was presented to the groups, it turned out that people actually still had varying opinions. Apparently, words had hidden the different visions, but an actual visual rendition of the dream landscape drew them out again!

Keeping the conversation going

The reignited debate on the dream landscape in our Contract Innovation Labs was an unexpected result for us organizers. It showed us that working with the illustrator could have been a whole different path to explore when developing the shared vision of the dream landscape. We chose to make some small adjustments to the paintings, but did not aim for a ‘picture perfect’ vision, because this could have taken several more sessions. Instead we approach the visuals as a ‘praatplaat’ (a Dutch word for ‘a picture to use as basis for discussion’). This tool can help us in the discussions around the ideal future landscape and how to get there, especially when we engage with policy makers.

Local and regional policy makers have been involved in the SWOT-analysis of the current Contract. However, they have not yet had the chance to react to the CIL’s dream landscape visualization. In the coming months, we will give them the opportunity to do so. First, we will present the visions in separate Policy Innovation Labs to inquire about the chances for the realization of the dream farming landscape. Secondly, over the summer, we hope to be able to organize ‘in person’ workshops in the respective regions with practitioners and policy makers , to present the results of the work  we did. We hope that these last workshops serve as an inspiration for local actors to continue working together also beyond the boundaries of this project, and to continue to keep the conversation going.

Improving funding scheme for landscape-scale agri-environmental management

Improving funding scheme for landscape-scale agri-environmental management

Katrin Prager (University of Aberdeen) from the Contracts2.0 team carrying out UK case study work provided input for a feedback call on the Countryside Stewardship Facilitation Fund. This funding scheme supports farmer collaboration and landscape-scale agri-environmental management. The feedback call was commissioned by England’s Rural Payments Authority (RPA) and run by the Game and Wildlife Conservation Trust (GWCT). The GWCT has now passed on a 33-page document of feedback. The feedback provides input to the responsible agencies and government department DEFRA, Natural England and RPA to help improve the funding scheme and collective efforts to strengthen the farmed environment.

For other ways that GWCT supports farmer collaboration, see the farmer cluster website: actions are intended to help form projects, gain inspiration and momentum and raise awareness for landscape-scale conservation.