Efficiency of Spatial Subsidies Under Information Constraints: A Case Study

This study compares the efficiency of homogeneous versus spatially heterogeneous subsidies in developing agricultural plans compatible with bird sustainability. Using the plains of Lleida as a case study—where incentives for agricultural intensification threaten a bird community‐we employ a spatially explicit model that simulates crop yields linked to a habitat suitability index for each species. Within this framework, we model subsidies to evaluate their impact on biodiversity conservation, farmer acceptance, required budget, and agricultural economic profitability. We also address incomplete information by relaxing the assumption that the regulator knows real opportunity costs and instead estimate them via sampling methods. Results show that a conservation‐focused homogeneous subsidy is significantly less efficient than a heterogeneous one. Heterogeneous subsidies differentiate between farmers' agricultural potential, enabling conservation goals to be met with lower budgets. Moreover, a development‐oriented heterogeneous scheme—which maximizes total agricultural profits while ensuring bird sustainability—can be even more effective, reducing implementation costs and promoting agricultural economic growth. However, incomplete information leads to suboptimal decisions, lowering total profits and causing losses for misidentified farmers who may require additional compensation. While heterogeneous subsidies remain budget‐efficient under incomplete information, achieving full farmer participation requires higher payments. This reduces their efficiency advantage, but heterogeneous subsidies still represent the more efficient option.