Practitioners picture desirable farming landscapes for 2040 and ideal agri-environmental contracts

Practitioners picture desirable farming landscapes for 2040 and ideal agri-environmental contracts

“How do agricultural practitioners envision desirable farming landscapes and ideal agri-environmental contracts?” In a detailed report, we collect and present answers to this question. We found that practitioners across Europe envision farming landscapes shaped by viable agricultural practices that strengthen and enhance ecosystem services. It is important that actors in the farming systems share the same values, cooperate and mutually recognise each other’s expertise to make the shared vision a reality. The social setting turned out the most critical change driver, followed by the legal and political framework and land use and environmental conditions. In this post, we share some of our key findings to illustrate what practitioners believe is necessary to unite the socio-economic viability of farming with the production of agri-environmental public goods in our farming landscapes.

Developing desired landscapes and dream contracts

To answer our initial question, we carried out 28 workshops and consultations in 13 Contract Innovation Labs (CILs) in nine countries across Europe, with a total of 354 participants over the past year. With farmers, environmental NGOs, nature associations, researchers, agricultural advisors and public administrations, we envisioned dream farming landscapes and ideal agri-environmental contracts to facilitate the sustainable transformation of the farming system (see Figure 1). This approach is based on the potential of positive future visions to stimulate sustainable change within the farming system in a participatory way.

 

Figure 1. Steps from dream contract development to implementation.

Based on key information provided by stakeholders from each CIL we analysed case-specific situations and problems using swot analysis. We then asked CIL participants to picture a desirable future dream landscape in the year 2040. We encouraged participants to prepare lists of enabling and limiting factors for realising the dream landscape. Finally, we asked them to envision agri-environmental contracts that would facilitate transformation toward the desired state. The participants reflected the contracts from different perspectives such as environmental effectiveness, socio-economic viability, duration and monitoring. Lastly, we developed dream contract trajectories – paths to reach the envisioned state.

Common dream landscape patterns

Based on short descriptions the CILs prepared of the dream landscape, we singled out 99 diverse dream landscape elements, which we clustered into eight landscape building blocks: viable and sustainable agriculture, regulating ecosystem services, social cohesion, biodiversity, multifunctionality, enabling landscape managers, health and wellbeing, and cultural ecosystem services. We ordered these building blocks into four almost-equally weighted categories: multifunctionality, agriculture-related topics, environmental-related topics and social context.

The category multifunctionality is relatively broad and refers to the simultaneous provision of different goods and services of the landscape or through agricultural activities. In the category of agriculture-related topics, the most common landscape element is viable and sustainable agriculture. Viable and sustainable agriculture should be profitable, provide opportunities for new generations of farmers, generate and process quality local produce, apply sustainable farming practices, use and produce renewable energy and optimise livestock production. The category of environmental-related topics includes the landscape elements regulating ecosystem services and biodiversity. Social context consists of the elements social cohesion, health and well-being and cultural ecosystem services. Social cohesion is an essential element indicating the importance of cooperation, shared values, the connection between communities and the landscape, and vibrant rural living (see Figure 2).

Figure 2. Representation of the dream farming landscape in CIL Oost-Gronningen. Several dream landscape patterns are illustrated.

Enabling and limiting drivers of change for the dream landscape

Change drivers are natural or human-induced factors that directly or indirectly trigger a change in an ecosystem. Direct drivers, such as habitat conversion and climate change, are pressures that directly affect ecosystem processed. Drivers that operate at a more diffuse level are indirect change drivers, such as socio-political, economic and technological factors.

In total, we identified 130 change drivers in our case studies that we assigned to five themes: social impact, legal policy and political context, land use and environmental impact, agro management viability and economic viability (see Figure 3). Across all cases enabling (N=62) and limiting (N=68) drivers are almost balanced. However, each case has a unique profile, which influences the likelihood of achieving the desired dream landscape. The most common them is social impact. It includes enabling drivers such as increased consumer demand, farmers’ intrinsic motivation and cooperation amongst farmers. The limiting drivers within this theme were a lack of trust and awareness.

 

 

Figure 3. Distribution of change drivers in five themes.

Unlike the three other themes, social impact as well as land use and environmental impact are described mainly by enabling drivers, meaning they are major building blocks for the dream farming landscapes. The limiting drivers are mostly related to economic viability (e.g., market fluctuations), the policy context (e.g., the uncertainty of current and future CAP developments) and agro management viability (e.g., uncertainty on the effects of farming practices) (Figure 4).

 

Figure 4. Limiting and enabling factors across themes.

Dream contracts for dream landscapes

Each CIL developed one or several dream contracts. These dream contracts are legal conduits to strike a balance between farmers’ or land managers’ economic interests and societies’ interests for the provision of environmental public goods and services. We analysed them for general characteristics, benefits, involved actors, payments and monitoring.

General contract characteristics include the targeted land use and contract length. Dream contracts targeted diverse land-use types such as grassland (N=12), arable crops (N=10) and permanent crops (N=7). Often, a contract combines several of these land-use types. The ideal contract length in most CILs ranges from five to ten years.

The dream contracts envision a wide range of benefits that go well beyond mere financial compensations for farmers (Figure 5). Overall, we identified 96 benefits that mostly help either society or farmers.

Figure 5. Envisioned dream contract benefits.

We split the financial benefits for farmers into indirect and direct monetary benefits. Direct monetary benefits include income support, cost savings and product added value.

All cases reported the involvement of one or more intermediary organisations. In eleven out of thirteen cases, a farmer group plays a crucial role to broker knowledge, manage payments, coordinate measures, carry out monitoring and build social cohesion.

In eight out of thirteen cases, funding is envisioned to come from the public sector, for example through agri-environment and climate schemes. Two cases aim for private funding and three cases envision a mix of private and public funding. Generally, we observe great interest for collective and results-based approaches, value-chain contracts and combinations thereof. Six out of thirteen cases like to experiment with combining contracts that include action-based and results-based features.

Almost all dream contracts envision that monitoring is carried out in results-based schemes and action-based schemes. We see a strong willingness from practitioners to be involved in monitoring.

Our results in the greater context

We do not claim that our results represent the whole farming community in Europe as they are entirely based on the perceptions of the participants in our 13 CILs, some of whom participated in several workshops. Furthermore, most participants are already engaged in contracts and are interested in reconciling farmer objectives with societal needs for agri-environmental public goods. Nevertheless, our results give interesting insights into practitioners’ perceptions about desirable changes in present agri-environmental contracts. Practitioners are keen to contribute to societal benefits, experiment with novel contract designs, and play a more active role in designing and monitoring agri-environmental contracts. These findings can support  the design of innovative Agri-environmental contracts and the corresonding policies and Strategic Plans within the New Delivery Model.

To learn more about our findings click HERE.

To learn more about each CIL’s dream landscape and dream contract follow these links:

  1. Limburg – Netherlands
  2. Groningen – Netherlands
  3. Koolstofboeren – Belgium
  4. Gulpdal – Belgium
  5. Northwest England – UK
  6. Hautes Pyrenees – France
  7. Madrid Region – Spain
  8. Bornholm – Denmark
  9. Agora Natura – Germany
  10. Hipp – Germany
  11. North Rhine Westphalia – Germany
  12. Örseg National Park – Hungary
  13. Unione Comuni Garfagnana – Italy

Written by Sven Defrijn (Boerennatuur Vlaanderen), Marina Garcia Llorente (Universidad Autónoma de Madrid), Edward Ott (Leibniz Centre for Agricultural Landscape Research), Photo Title: © Illiya Vjestica on Unsplash

The future of German agriculture – A task for society as a whole

The future of German agriculture – A task for society as a whole

“German Commission on the Future of Agriculture” (“Zukunftskommission Landwirtschaft”) presented its final report to Chancellor Angela Merkel on July 6, 2021. Various stakeholders unanimously state their commitment to strengthen efforts of environmental and climate action and to improve animal welfare. The Commission stipulates that for the successful transition to a more sustainable agricultural production, economic viability is an indispensable prerequisite. Farmers can only provide environmental services if the farms can secure a sufficient income. Stakeholders also agreed that the transition is a task for the whole of society and that politics needs to provide a conducive policy environment to enable change.

 

Germany as a trailblazer for future-oriented thinking?

Germany already has developed standards that are considerably higher than the EU average regarding various sectors, particularly in the field of animal welfare: It is the world’s first country to ban the culling of male chicks (offspring of laying hens) by the end of 2021. This follows the ban on castrating piglets without anesthesia at the start of 2021. Almost in passing, a leading discounter recently announced that it would only sell meat that was produced in line with higher animal welfare standards by 2023. These new trends ask for quite significant adjustments in livestock keeping. Therefore, they raise the question, if the legal requirements (e.g. construction law, clean air act) will be adjusted to support the modifications needed for higher animal welfare and if there will be enough incentive for livestock farmers in Germany to make it happen.

A diverse committee acknowledging various interests

The final report of the Commission on the Future of Agriculture, a toughly negotiated agreement, runs in a similar vein and summarizes pragmatic concessions from different interest groups for the sake of the greater good. Thirty-one committee members representing agriculture, trade, animal welfare, consumer organizations, environmental protection and science, were asked to develop a shared vision, recommendations and guidelines for a sustainable and future-oriented German agriculture. Established in September 2020 by Chancellor Angela Merkel the committee met regulary. Ideas how to reduce external costs and to preserve nature for future generations while at the same time maintaining food security in Germany were exchanged. The report presents pathways for sustainable agricultural production systems that consider economic, ecological, and social objectives as well as animal welfare.

Transformation needs support from the society as a whole

Traditionally, perspectives on controversial topics, such as animal welfare standards and the economic compensation for farmers who carry out additional conservation practices, differ widely between agriculture and nature conservation. Considering the partially hardened positions of the two professions, it is commendable that the Commission on the future of agriculture reached a consensus under a constructively supporting chairmanship. Guiding principle and starting point for the committee’s work was the notion that environmental efforts must translate into economic success and societal recognition. Support of the whole society is necessary for a successful transformation. Putting responsibility only on farmers will not do the job. More likely, it will lead to the exhaustion of families and abandonment of farms.

Key outcomes

The 190-page document combining the diverse expertise of the committee members is worth a read. It features familiar ideas as well as progressive thinking.

Most significant outcomes from a farmer’s perspective are the following:

  • The German agri-food sector continues to walk the path towards a more sustainable future.
  • Agriculture alone cannot bear the massive cost necessary for the transformation process.
  • Both, companies and society need to invest in German agriculture.
  • Only sufficient income will secure the future viability of farms and motivate new agricultural practitioners.
  • A shift of agricultural production abroad (leakage effects) through unbalanced (and underfinanced) regulations needs to be prevented.
  • The Common Agricultural Policy (CAP) should be further developed and (together with national funding) support the transformation while securing the urgently needed planning and investment certainty for farmers.
  • New breeding techniques should be used to develop plant varieties adapted to challenges posed by climate change and pests.
  • Requirements for animal welfare should be (financially) supported to secure the perspective for high-quality livestock farming in Germany.
  • Research and innovation should provide the knowledge base for resource-, animal-, and climate-friendly practices.
  • Digitalization offers the potential to reduce the use of fertilizer and plant protection products through precision agriculture.
A Common Agricultural Policy

CAP support will play a key role in financing and managing the transition to a sustainable food system in Germany. Provided that farms can operate sufficiently competitive, CAP support has to enable farmers to contribute to additional ecological and social achievements. The uphill struggle in the course of the EU trialogue negotiations on the CAP 2023-2027 has shown how hardened positions of different interest groups can endanger the necessary financial support for farmers. At the end of June 2021 a compromise was reached, just in time to not fail the millions of European farmers relying on the CAP’s financial income support.

Cooperation is the key to success

In the long term, the “Zukunftskommission Landwirtschaft” suggests for Germany that area-based direct payments should be gradually converted into payments supporting specific measures to reach societal goals (such as clean water or sustaining biodiversity) within the next two CAP funding periods. The committee emphasizes that during the transition process, farmers should not suffer a net loss to their income. Furthermore, instead of regulation, cooperation should be fostered to motivate farmers to implement ecologically effective measures on their farms. To increase the effectiveness of agri-environment-climate measures (AECM) a collective implementation (e.g.  Dutch collective model) is specifically mentioned as being a promising solution due to its landscape scale approach. The report also emphasizes the necessity for consumers to accept fair prices for agricultural products. They should integrate the higher production costs, to maintain the profitability of agricultural enterprises.

A blueprint for a greener future?

Although not a legally binding document, policy makers will hardly be able to ignore the report. In the eyes of the committee members, the recommendations of the commission  should serve as a blueprint for policy innovation. The next German government is likely to be judged according to its efforts regarding the support of the transformation process. The recommendations have the potential to get politics moving and motivate society to live up to the commitment to make this ambitious vision come true.

Contracts2.0 at the EAERE conference

Contracts2.0 at the EAERE conference

Researchers from the Contracts2.0 project participated in the European Association of Environmental and Resource Economics Conference (EAERE), presenting the food industry’s preferences for environmentally-friendly practices in food production. The virtual congress took place in Berlin from 23–25 June 2021.

Contracts2.0 contributions to the conference

We presented work on developing value chain approaches for the increased provision of environmental public goods by farmers. Our work focused on the food industry’s preferences for product labelling for the provision of ecosystem services. We carried out qualitative interviews with experts in the food industry to explore different labelling options. Labels could signal to consumers the kinds of public goods farmers can provide and allow the industry to sell its products with a price premium. They would also add transparency to the purchasing process as consumers usually cannot observe farm work and fields. The study’s final results will be published later this year.

Further, Christoph Schulze introduced the Q-methodology approach, which he used to explore stakeholder preferences for agri-environmental contract design. Related to these findings, our latest Deliverable synthesises practitioners’ evaluations of innovative contract approaches and provides insight into ideal contracts.

Presentations given by Jens Rommel (SLU), Julian Sagebiel (SLU), Mikołaj Czajkowski (Universtiy of Warsaw), and Wiktor Budziński (University of Warsaw) focused on methodological aspects of stated preference methodology. We will use this methodology to inquire about farmers’ environmental preferences. In this line, early research results on the potential to introduce collaborative agri-environmental contracts are now available. Soon, we will launch an international study on farmers’ preferences for result-based contracts to protect biodiversity that we hope to present during the next EAERE conference!

Written by Katarzyna Zagórska (University of Warsaw) and Laszlo Beer (ZALF), Photo Title: ©Ingo Joseph on Pexels

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

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

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.

(German version /deutsche Version)

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/

Title Photo by Warren Wong on Unsplash

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.