Farmers making the choice to adopt voluntary ‘green practices’ (farm schemes) are influenced by how much they are already obliged to contribute to the environment, a new study has found.
A ‘behavioural experiment’ assessed the impact of two policy features of the new green architecture of the EU Common Agricultural Policy (CAP) on farmers’ adoption of environmentally friendly practices:
- Increasing mandatory adoption;
- Shifting budget to voluntary schemes.
The study’s results shed some light on the potential trade-offs between mandatory and voluntary schemes to increase agriculture’s environmental and climate performance.
Farm schemes – impact of voluntary and mandatory
The study, by the Joint Research Centre (JRC) of the European Commission, found that the more mandatory requirements are placed on farmers, the less likely they are to make additional voluntary contributions.
However, if the mandatory requirements are ambitious enough, the positive impact on the environment more than offsets the drop in voluntary actions.
The study explored the conditions under which farmers are more or less likely to decide to adopt voluntary environmentally friendly farming practices, in addition to mandatory ones.
For voluntary practices, the higher the level of direct payments farmers receive, the more likely they are to take up such green activities.
Behavioural experiment
Behavioural science is a relatively new approach to understanding agricultural policy in the EU, which has traditionally relied on modelling and other analysis to pre-test the impact of different policy options, according to the European Commission.
E.g. in the provisional political agreement on the new CAP, EU member states are asked to prepare strategic plans to implement the policy over the next five years.
Behavioural insights, such as those deduced from this study, can help member states to prepare effective strategic plans.
Farmers involved
600 farmers involved in this experiment were split into two groups:
Group 1
The aim was to assess the impact of different levels of mandatory contributions on the voluntary contributions made to the environment;
Group 2
The aim was to assess the impact of different levels of income through direct payments.
For the first group, farmers were each given a constant income (in the form of tokens) from which they were instructed to contribute either five, 40 or 90 tokens as a ‘mandatory environmental contribution’.
They were then asked how many additional tokens they would voluntarily contribute to the environment, for which they received a 90% compensation.
The farmers obliged to contribute 40 tokens tended to contribute less on a voluntary basis than those obliged to contribute only five tokens.
But, interestingly, their overall contribution ended up about the same.
For those farmers obliged to contribute 90 tokens, their voluntary contribution decreased further, but not at the same magnitude.
This suggests that a positive effect on the environment can be achieved by a combination of mandatory and voluntary contributions, but also that high mandatory contributions will lead to a higher total contribution to the environment.
In the second group, farmers received 300, 265 or 215 tokens as their ‘income’ and were told that variations were due to changes in their income support payment.
They were also then asked how many tokens they would contribute to the environment.
Those starting with more tokens were likely to make higher voluntary contributions, suggesting that when farmers feel they receive high direct payments, they are also willing to contribute more to the environment.