Farmers’ preferences over alternative AECS designs. Do the ecological conditions influence the willingness to accept result-based contracts?

Agri-environmental-climate schemes provide payments for ecosystem services by compensating farmers to implement management actions or obtain ecological results. To compare farmer preferences for action-based schemes, result-based schemes, or a hybrid, we conduct a discrete choice experiment in a case study from Germany. We elicited farmers’ choices for alternative grassland biodiversity payments through an in-person survey and measured farms’ ecological performance using a biodiversity index. Results reveal that neither the payment mechanism nor its amount is a primary driver of farmer decision-making. Instead, the applicability of the prescribed management practice to the farming system, and the achievability of the outcome, are key for uptake. Intensive farmers are more likely to choose hybrid-based solutions than extensive farms, which prefer a result-based approach. Farms with higher biodiversity tend to accept result-based schemes more frequently and are willing to enrol a greater share of their land. Our findings suggest a potential lack of additionality but also that farmers’ awareness about their farms’ ecological potential influences uptake of result-based schemes. To encourage farmers participating and enroling more land in these schemes, policymakers should tailor the payment-mechanism to different farmers and provide in-site technical advice.