Result- and Value-Based Agri-Environmental Payments to Landscape Elements and Forest edges
A Result- and Value Based Payment model was developed, implemented and evaluated in a three-year pilot project. The payments were directed to landscape elements and forest edges at arable fields.
The reason for directing the value-based payments to these landscape elements and the forest edges is that they are of great importance to the biodiversity of the agricultural landscape, the cultural heritage and how people experience and enjoy the landscape. Almost all public goods of cultivated landscapes are concentrated to these objects.
The payments are determined by indicators that are measured per object, to direct the payments more efficiently. The payments give farmers both economic incentives and financial resources to manage landscape elements and the fields surrounding them, necessary for their environmental services. Accordingly, it promotes higher environmental qualities of the elements and reduces the risk that fields rich in stone walls and other elements are abandoned.
Location of the schemeone region
The pilot project was carried out in the Falbygden area, in the south-west of Sweden (see map).
Duration of the schemeSince: 2017
Objective(s) of the scheme / project
- Cultural heritage
- Landscape amenities, including recreation, tourism
The pilot project aims to evaluate how such a result- and value-based compensation system works in practice and if this is a feasible option for agri-environmental payments at national level. The objectives included to study and evaluate the effectiveness and the efficiency of the model compared with the previous management based scheme, administrative issues, control properties, transaction costs, and how the farmers experienced the payment model and their opinion about it.
A major objective was to test the design and the combination of the indicators that determined the top-up result payments. The purpose was to address issues whether the indicators jointly reflected the presence of public goods well, if the farmers understand the indicators and the motives for them, etc. Another task was to investigate whether the payment levels were appropriate and gave sufficient incentives to maintain or improve the environmental qualities.
Which habitats or species are in the focus of the scheme / project?
- Habitats (incl. habitats of Fauna-Flora-Habitat-Directive (FFH-D.))
- Landscape elements
Linear field elements: stone walls, ditches, creeks, vegetation strips, cattle roads
Point field elements: field islets, stone cairns, solitary trees
Forest edges at arable land
Other landscape elements were not included in this pilot study due to project resource constraints.
Which indicators are used?
- Habitats (incl FFH and BD)
- Species (incl FFH and BD)
- Landscape Elements
Location; see below.
Five types of indicators were employed:
- Element type indicators. The basic payments were differentiated depending on type of element, for example, giving a higher payment to stone walls than to mere vegetation strips between fields. The motive is that stone walls in general supply more public goods.
- Size indicators. Higher payments go to larger objects than to the smaller ones. Motive: larger objects supply more habitats and other public goods, ceteris paribus.
- Structure indicators. Physical aspects of structures that are positively or negatively correlated with the supply of public goods. Examples: absence of overgrowth by brushwood or shrubs, value trees, permanent water surface in ditches and creeks (not drying out), and “good status” of stone walls (not in decay).
- Species indicator. Alternative 1: More than 6 or, alternatively, 10 of species from a list of 20 predetermined vascular plant species are observed on the object, or at least one of plant species that is red-listed or protected. Alternative 2: The conditions for the higher and the lower payment levels are that not more than 50 or 25 percent of the area of a point element or of the length of a linear element is covered by any of the predetermined mis-mangement weeds (e.g. nettles, Urtica dioica), respectively.
- Location indicator. The object is not more than 100 m away from a road or railway with many travellers. Motive: the social value of the object is higher the more people that enjoy its environmental services, ceteris paribus.
Design of scheme / project
- Pure Result Based Payments
- Stepwise increasing Result Based Payments
The payment model was designed with a basic payment per object (e.g. a stone wall) with top-up payments based on indicators reflecting the presence of environmental public goods.
By which fund(s) is the scheme / project implemented?
- Other measures of Rural Development
The project was co-financed by the Swedish Farmers Federation (LRF) and WWF, Sweden.
How are the incentives (payment levels) calculated?
- Based on the social value of ecosystem-services
The ambition was to settle the payments at the level where the indicators correspond to the socially efficient price of the addressed public goods, that is, where the social marginal cost equals the social marginal benefits of the environmental service. The values of the environmental benefits were derived from the Swedish database on social prices of environmental effects (http://www.naturvardsverket.se/miljoprisdatabas), based on WTP-surveys, risk analyses, etc.
Is there a top up in case of reaching the goals?
There are no specific targets set up, neither at local nor on national level, besides general goals of promoting biodiversity etc.
How many hectares are in the scheme (year 2020)?
- 1.001 – 2.000
How many farmers take part in the scheme?
- Less than 50
How are participating farmers supervised/advised?
- Information documents (pamphlets, reports, etc.)
- Information meetings/workshops (voluntary)
The participating farmers were invited to field walks, annually in late spring. The interpretation of the indicators and their threshold values for higher payment levels were explained and discussed when visiting pedagogic examples of field elements and forest edges. The presence of field elements also opened for discussing other topics related to the RBP-model, inculding the motives of the payments. The field walks were much appreciated by the farmers, and also played a positive social role.
A main reason for having field walks with a group of farmers was to keep transaction costs low, since it is less time consuming than visiting each farm. We wanted the pilot project to be as realistic as possible, and individual supervision is not realistic if scaling up the payment model to the national level. A bonus effect was that the field walks enabled dynamic discussions among farmers and the project managers.
There was no individual advisory service offered, neither on the administration of the payments, nor on practical management of the landscape elements, as this was considered too costly for a full scale, national programme. The farmers had, however, the opportunity to call the project team should questions arise about the application or the control.
Are there any evaluation results (2020)?
- In preparation
Main results are:
- The indicators were with one exception appropriately designed, reflecting well the presence of public goods. They were apprehended as clear and simple to understand and utilise by the farmers. Just a very few cases of miss-reporting occurred.
- The species indicator did not operate well. It was designed as observing on the object at least 6 or 10 species from a list of 20 pre-settled vascular plant species. The indicator was time consuming to report and control. It was also difficult to control, since the control cannot be conducted until late July or August. The vegetation of grass and herbs may be tall on many objects at that time of the year, aggravating the control. (A similar indicator may be more feasible for grassland that always is grazed or cut.)
- Structure indicators – if well designed – may be very efficient and sufficient to differentiate between objects with more and less public goods.
- The set and combination of composite indicators together covered the presence of environmental public goods fairly well.
- Just minor improvements in the management and the environmental status of the objects were observed over the project time. The farmers explained this by stating that the three-year project time was too short to make it worthwhile to make larger efforts. Another explanation may be that the incentive structure of the top-up payments was too weak, implying that higher payments are needed for higher levels of the indicators. An alternative approach could be to design a hybrid model with payments for management actions (such as clearing of brushwood) combined with RBPs for environmental qualities.
- The participating farmers liked the Value and Result Based Payment approach and model. Without exception, they preferred the RBP-model over the previous, management based scheme. The flexibility and their own responsibility for the management were main reasons expressed for the preference.
- The administration worked well. Our conclusion is that such a model may well be incorporated into the national, rural development programme, if there is a political support for the approach.
- The transaction costs may, accordingly, be kept at an acceptably low level also if the model is implemented at national level.
- The information to the farmers received favourable verdicts by the participating farmers, implying that it is possible to communicate the model and its indicators, payment levels, etc. also for as complex environmental objects as landscape elements at low costs.
- The major obstacle to implement such a scheme at national level within the next couple of years is that it would involve some development of the IT-system, and the Swedish Board of Agriculture does not currently have resources for the task.
Swedish Board of Agriculture
Vallgatan 8, 551 82 Jönköping, Sweden
+46 36 15 50 00