How cost-effective are result-oriented agri-environmental measures? - An empirical analysis in Germany.

Abstract Agri-environmental measures (AEM) are the central area-based measures of the second pillar of the Common European Agricultural Policy. Cost-effectiveness of AEMs has to be improved. In this paper a newly designed AEM called result-oriented incentive is empirically analysed for the first time concerning its impacts on environmental effects and cost. Result-oriented financial incentives are linked directly to the desired environmental objectives and allow farmers to choose the most efficient way of management to reach them on their own. In this paper, we present the results of 90 interviews with farmers who have participated in a result-oriented AEM in Baden-Wuerttemberg (Germany). We investigated potential advantages (flexibility, innovation, higher intrinsic motivation and improved continuous adaptation). In addition, we researched disadvantages (transaction costs involved in control efforts, risk for farmers). Our results show that such kind of AEM has a positive impact on cost-effectiveness. However, the concrete design and the implementation process of these AEMs play a crucial role for their successful application.

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