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Designing Agri-Environmental Schemes to cope with uncertainty

Author

Listed:
  • Margaux Lapierre

    (US ODR - Observatoire des Programmes Communautaires de Développement Rural - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Gwenolé Le Velly

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)

  • Douadia Bougherara

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)

  • Raphaële Préget

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)

  • Alexandre Sauquet

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)

Abstract

Agri-environmental schemes (AES) are part of the main tools used by decision makers to trigger a transition in agricultural practices but one of the factors that discourages farmers from enrolling is the uncertainty of the costs and benefits associated with the adoption of the new practices. In this study, we distinguish between the "internal uncertainty" that is related to the characteristics of the farmer and his/her parcels and "external uncertainty", which is related to the occurrence of external events. We propose three innovations to better account for uncertainty in AES design: the possibility to suspend the conditions of the contract for one year, an opt-out option after three years and the opportunity for farmers to share their experience in peer-groups. We test their attractiveness through a choice experiment and analyze our results using a mixed logit model. We find that proposing AES that allow suspending the conditions of the contract for one year enhances participation.

Suggested Citation

  • Margaux Lapierre & Gwenolé Le Velly & Douadia Bougherara & Raphaële Préget & Alexandre Sauquet, 2023. "Designing Agri-Environmental Schemes to cope with uncertainty," Post-Print hal-03811624, HAL.
    • Handle: RePEc:hal:journl:hal-03811624
    DOI: 10.1016/j.ecolecon.2022.107610
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03811624v1
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    Cited by:

    1. Berman, Nicolas & Couttenier, Mathieu & Leblois, Antoine & Soubeyran, Raphael, 2023. "Crop prices and deforestation in the tropics," Journal of Environmental Economics and Management, Elsevier, vol. 119(C).
    2. Thiermann, Insa & Stagni, Francesco & Dries, Liesbeth, 2025. "Dutch farmers' views on public and private incentives for soil health improvements," Agricultural Systems, Elsevier, vol. 230(C).
    3. Tietjens, Florian & Schröer, Daniel & Latacz-Lohmann, Uwe, 2024. "Farmers' preferences for the design of a slurry hosing support scheme to combat soil compaction: Insights from a discrete choice experiment in Germany," Agricultural Systems, Elsevier, vol. 219(C).
    4. Will, Meike & Jäger, Felix & Müller, Birgit, 2025. "Farmer decision-making on agri-environmental schemes: An agent-based modelling approach to evaluate different policy designs in Saxony, Germany," Agricultural Systems, Elsevier, vol. 229(C).
    5. Christoph Schulze & Katarzyna Zagórska & Kati Häfner & Olimpia Markiewicz & Mikołaj Czajkowski & Bettina Matzdorf, 2024. "Using farmers' ex ante preferences to design agri‐environmental contracts: A systematic review," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(1), pages 44-83, February.
    6. Romy Greiner, 2023. "Examining Participation in and Supply of Private Land for Voluntary Conservation in Australia’s Tropical Savannas: A Discrete-Continuous Choice Experiment," Land, MDPI, vol. 12(7), pages 1-19, June.
    7. Arfa, Nejla Ben & Ghali, Mohamed, 2024. "High environmental value (HEV) certification: sharing of costs and risks among value-chain stakeholders," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 15(02), June.

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    Keywords

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    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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