Co-Design of innovative contract models for agri-environment and climate measures and the valorisation of environmental public goods
Report on the national policy context
Deliverable 15 / 4.2
Main Author/s: Eszter Kelemen (ESSRG), Boldizsár Megyesi (ESSRG), Erling Andersen (UCPH) Co-Author/s: Andrew Cooke (Natural England), Céline Dutilly (CIRAD), Marina García- Llorente (UAM), Dieter Mortelmans (INBO), Francesco Riccioli (Uni Pisa), Lenny van Bussel (WUR) Contributions from: M.F. Arberas (Heliconia), S. Aubert (CIRAD), B. Balázs (ESSRG), E. Bouquet (CIRAD), D. Buffière (GIP-CRPGE), E. Cheyns (CIRAD), L. Deijl (BoerenNatuur), F. Di Iacovo (Uni Pisa), J. Dodsworth (Uni Aberdeen), D.S. Espinosa (Uni Pisa), C. Eychenne (University J. Jaures), F. Fewster (Natural England), W. Ganser (SWK), C. Gendre (INRAE, ODR), S. Guédé (CIRAD), C. Hamon (DBV), P. Lind (SRK), R. Moruzzo (Uni Pisa), G. Pataki (ESSRG), K. Prager (Uni Aberdeen), Anne Sallent (GIP-CRPGE), C. Yacamán (Heliconia), S. Wanner (INBO), C. Weebers (BoerenNatuur), Reviewed by: Jens Rommel (SLU), György Pataki (ESSRG)
Deliverable nature: Report Dissemination level: Public Work Package: WP 4 Total number of pages: 39 Date of delivery: Contractual: 30/04/2020 Actual: 28/04/2020 Version: final Keywords: Policy Innovation Lab, barriers, opportunities, policy context
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EXECUTIVE SUMMARY
The Contracts2.0 project aims to improve the environmental impact of AECMs, involving farmers and other market actors as well as policy makers, mainly by analysing and (re-) designing existing and novel contractual arrangements for the provision of agri-environmental-climate public goods. The main objective of this Deliverable (D4.2) is to prepare a cross-country comparative analysis of the actual policy context of novel contractual solutions - namely the result-based, the collective, the land tenure and the value chain approaches - and thereby improve the understanding of contract governance.
The key source of information was a set of workshops organized in 9 Policy Innovation Labs which have been established by the Contracts2.0 project and run in Belgium (Flanders), Denmark, France (Hautes- Pyrénées), Germany (North Rhine-Westphalia), Italy (Tuscany), Hungary, The Netherlands, Spain (Madrid) and the UK (England). Workshops were organized in January-February 2020 with the participation of policy makers, public administrators, experts and practitioners, and followed a flexible guide. Main outcomes of the workshops, reported in a common template, were further analysed with qualitative and quantitative content analysis methods. Based on this analysis, we provided answers to two key questions, as described briefly below.
1. How are agri-environmental-climate measures (AECM) used in different countries across the EU? Several agri-environmental-climate measures are implemented in EU countries which combine elements of different novel contractual models as well as conventional contracts. Novel contracts are already applied in most of the studied regions, and while they are considered promising, many questions remain about their technical / institutional setup and implementation. The collective contract proved to have the most diverse institutional setups, while fewer independent examples were mentioned for land tenure and result-based contracts as well as value chain approaches.
2. How do novel contractual solutions fit into the current policy landscape - i.e. what are the major barriers and opportunities of the implementation? A large number of different barriers exist in Europe which hinder the effective implementation of both novel contracts and more mainstream measures. The most widespread ones are budget and investment related challenges, social norms and acceptance, and the technical challenges of how to establish robust and cost-effective measurement. The interplay between these barriers creates a country- or region-specific environment for AECMs, which needs to be taken into account when new contracts are designed and implemented. Coordination and communication are the main opportunities to solve problems related to agri- environmental-climate measures. Control, simplification, and an increased role of farmers and farmers’ advisory services were also considered key topics to improve the implementation of different contract types. Although there are no ready-made solutions, there are several links between the opportunities identified, which shows the potential of creating synergies if several opportunities are combined.
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TABLE OF CONTENT 1. INTRODUCTION ...... 4 1.1. Aim and scope of the deliverable ...... 4 1.2. Policy making and policy analysis - the Contracts2.0 approach ...... 5 1.3. The methodological approach used in this deliverable ...... 6 1.4. Major information sources used in the deliverable ...... 7 2. A BRIEF OVERVIEW OF THE POLICY LANDSCAPE ...... 9 2.1. Agri-environmental-climate measures in the CAP ...... 9 2.2. Result-based contracts ...... 11 2.3. Collective contracts...... 12 2.4. Land tenure contracts ...... 14 2.5. Value chain contracts...... 15
3. CURRENTLY AVAILABLE AGRI-ENVIRONMENTAL MEASURES FROM A NATIONAL PERSPECTIVE ...... 16 3.1. Initial screening of the national policy landscape (June 2019) ...... 16 3.2. Agri-environmental measures used in different regions and countries ...... 17 3.3. Barriers identified in the current policy landscape ...... 20 3.4. Existing opportunities in the current policy landscape ...... 25 4. HOW TO MAXIMIZE AGRI-ENVIRONMENTAL PUBLIC GOODS IN THE CURRENT POLICY FRAMEWORK? ...... 28 4.1. Summary of results ...... 28 4.2. Study limitations and future research questions ...... 30 Acknowledgement...... 31 References ...... 31 Online sources ...... 34 ANNEX 1 CODES EMERGING FROM THE QUALITATIVE CONTENT ANALYSIS ...... 35 ANNEX 2 CROSS-COUNTRY COMPARISON BASED ON CODING FREQUENCIES ...... 37 LIST OF FIGURES Figure 1: Contracts2.0 Policy Innovation Labs across Europe ……………………………………………………………4 Figure 2: Comparison of key aspects of eco-schemes in CAP Pillar I and agri-environmental-climate commitments in CAP Pillar II ……………………………………………………………………………………………………………10 Figure 3: The percentage distribution of the (sub-)categories of barriers across the four contract types ………………………………………………………………………………………………………………………………………………23
LIST OF TABLES
Table 1: List of the workshops of the Policy Innovation Labs………………………………………………………………8 Table 2: Experiences with novel contracts in PILs ……………………………………………………………………………19 Table 3: Existing barriers for the four novel contract types ………………………………………………………………21 Table 4: Coding summary for barriers ………………………………………………………………………………………………35 Table 5: Comparison of barriers across PILs………………………………………………………………………………………37 Table 6: Comparison of opportunities across PILs ……………………………………………………………………………38
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1. INTRODUCTION
1.1. Aim and scope of the deliverable Current agri-environmental-climate measures (AECMs), implemented in European countries either as part of the Common Agricultural Policy (CAP) of the EU or as national or regional measures, are diverse and manifold. Nevertheless, the provision of environmental public goods is not optimal (Brown et al. 2019; Pe’er et al. 2014, 2019). Amongst others, this calls for novel contract-based approaches which provide the right incentives to farmers to produce more environmental public goods, but also allow them to reduce the conflict to reconcile the profitability of their farms with sustainability objectives. The Contracts2.0 project aims to improve the environmental impact of AECMs, involving farmers and other market actors as well as policy makers, mainly by analysing and (re-)designing existing and novel contractual arrangements for the provision of agri-environmental-climate public goods. Work package 4 of the project focuses on policy making and implementation processes and invites policy decision makers, public administrators, policy experts and practitioners to be part of its Policy Innovation Labs (PILs) in order to support the design process at local level Contract Innovation Labs (CILs) via regular feedback, and to get engaged in policy implementation and uptake of the new contractual solutions at wider scales. How PILs are set up and operating is described briefly in Section 1.3, while tools offered for PILs are discussed in Deliverable D4.1 (Andersen, Kelemen, and Megyesi 2020). Figure 1 shows the list and geographical location of the PILs.
Fig.2: Contracts2.0 Policy Innovation Labs across Europe (source: Contracts2.0 website, URL1)
The major objective of D4.2 is to prepare a cross-country comparative analysis of the actual policy context of novel contractual solutions - namely the result-based, the collective, the land tenure and the value chain approaches - and thereby improve the understanding of contract governance (Prager et al. 2020). With this analysis we aim to share lessons learnt across the Contracts2.0 PILs on how different countries/regions implement novel contractual models, and draw some general conclusions about contextual factors that limit or enable the implementation of novel contracts. To achieve this overarching objective, the deliverable answers two main questions:
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How are agri-environmental-climate measures (AECM) used currently in different countries across the EU? How do novel contractual solutions fit into the current policy landscape - i.e. what are the major barriers and opportunities of the implementation? D4.2 is based on the first year activity of the Policy Innovation Labs (PILs) and synthesizes knowledge and experience across policy-making, public administration and science. By sharing and comparing country-specific experiences with current and novel AECM, we assess the applicability of existing solutions at a wider scale and highlight the challenges that arise from the institutional, socio-cultural, geographical and agronomic diversity of the countries participating in this study. Key messages from this analysis will serve as a starting point of the innovation process in PILs by pinpointing leverage points.
The report is structured into five major sections. The remaining parts of the Introduction (Sections 1.2, 1.3 and 1.4) describe our methodological approach and the major information sources we used during this analysis. Section 2 provides a brief overview of the wider policy landscape based on a literature review. Besides summarizing the key scientific findings in relation to the four contractual models central to this project (result-based, collective, land tenure and value chain approaches), this section will also discuss how the EU’s mid-term and long-term policy outlook (headed for example by post- 2020 CAP’s future green architecture, European Green Deal, adapted European climate targets, challenges from impacts by COVID-19 pandemic) can facilitate or restrict novel contractual solutions. The third section assesses the currently available measures based on the interactions we have had so far in the PILs. In Section 4 we identify the barriers and potential solutions to foster the implementation of novel contracts. The concluding section provides a critical reflection on what is already working, as well as how future opportunities can be created to implement new contractual solutions. Additionally, we list some selected bottom-up research questions that were raised during the PIL meetings by experts, policy makers and practitioners/farmers. 1.2. Policy making and policy analysis - the Contracts2.0 approach There are two main competing assumptions about how policy is designed and implemented (Gordon, Lewis, and Young 1993). According to the rational model, policy making is considered as a rational and controlled process which aims to solve a technical problem in a consensual environment (even if conflicts emerge, they can be managed via negotiations). On the other hand, the political model suggests that policy making is an inherently political process blurred by the individual values and interests of participating actors, and both the design and the implementation of the policy face constraints and raise conflicts. In this deliverable we assume that creating and implementing agri- environmental-climate measures is a challenging political process, shaped by several actors and diverse interests (e.g. different degrees economical, ecological and social perspectives, small-scale farmers and large-scale farmers, extensive and intensive agricultural production, different administrative tasks by agricultural and environmental authorities). While analyzing and characterizing contractual solutions (e.g. interventions, schemes, measures) embedded in such a political process is an important part of WP4 and the target of this deliverable, our working package aims to go beyond the analytical approach and engages policy decision makers in a dialogue with different stakeholders (via the PILs and the CILs) to foster implementation and wider policy uptake. Therefore, two mutual activities of WP4 are crucial: 1) the analysis of the agri-environmental policy and its measures, and 2)
©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 5 / 39 D 15 / 4.2 the facilitation of an innovation process with the engagement of policy actors to support implementation of novel contracts.
Policy analysis, in general, can focus on the context, the process and the content of the policy (Carey et al. 2016; Walt and Gilson 1994). Each of these subjects can be characterized by the major actors shaping them, as well as other elements (e.g. the phases of the policy process or the goals and instruments of the policy) clearly defined by literature (Vogel and Henstra 2015). In this deliverable, we notably focus our analysis on the policy content and the policy context. Regarding policy content, we analyze how existing interventions under CAP support are currently addressing agri-environmental benefits and how specific mid-term and long-term policy perspectives (e.g. CAP’s future green architecture, European Green Deal etc.) could pave the way for new approaches in agri-environmental policy. We specifically focus on measures used in different European countries and regions to incentivize agri-environmental-climate public good provision. Regarding policy context, we collect and assess the major contextual factors (e.g. socio-economic, cultural, geographical, agronomical, institutional and regulatory characteristics or technical details of certain contractual models, among others) which influence the effective implementation and the impact of measures. 1.3. The methodological approach used in this deliverable Since Contracts2.0 is a project applying the multi-actor approach, interaction with multiple stakeholders is a central element in each step. In WP4 the Policy Innovation Labs (PILs) - each led by a coordinator organization (a research or action partner in the Contracts2.0 project) - create a framework for continuous dialogue and serve as the major means to collect data and knowledge. Therefore, D4.2 builds on the first round of PIL workshops and the a priori collection of data and knowledge, which mainly happened through informal meetings or face-to-face interviews with key decision-makers. In addition to these face-to-face and participatory approaches, we conducted a literature review to explore how AECM in general and novel contractual solutions in particular are assessed in peer-reviewed literature.
Facilitated open dialogue with policymakers, public administrators, experts and relevant stakeholders participating in the PILs served as the main approach to collect data and knowledge. Since participants of this study were the members of the PILs, their selection did not follow a strict scientific sampling strategy. Instead, they were invited by the coordinators of PILs in a purposeful manner to represent all major political decision making bodies (e.g. ministries, public administration bodies), as well as key actors, interest groups, policy experts and practitioners. While the general rule for inviting PIL members was the same in each country (i.e. relevance to political decision making), the exact composition of the PILs varies from country to country, due to different institutional and organizational structures, as well as heterogeneous traditions of policy dialogue (e.g. in Germany participants of the first PIL workshop mainly came from relevant ministerial bodies, farmers associations and universities, while in Hungary green NGOs and scientific experts outweighed the presence of public administrators and policy decision makers). The diversity of participants across the PILs made a wide range of perspectives possible for contributions during the workshops.
As part of the preparatory work, the WP4 coordination team created a detailed workshop guideline for PIL coordinators and provided a unified reporting template to synthesize and report back the major findings (see Milestone 18 (MS4.2)). Besides the written guidelines, a face-to-face workshop session was held at the cross-work-package meeting in Aberdeen (11-13 November 2019) to offer support and discuss any potential challenges faced by PIL coordinators. In early January 2020 problem-solving video conferences were offered to PIL coordinators to discuss any questions or difficulties they had and to
©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 6 / 39 D 15 / 4.2 find solutions together. Additionally, further clarification and support were provided by email if PIL coordinators requested help.
Each PIL has organized a first half-day workshop, which was structured into three major parts: 1) introduction (incl. a presentation of the project, the introduction of the participants, and in most cases a summary of the activities of the Contract Innovation Lab (CIL) in the given country), 2) an interactive overview of the current policy landscape with a focus on major barriers for innovative type of contracts, and 3) a world café style discussion on how current barriers could be overcome. As this general structure is indicating, the major objective of the workshop was to discover the context of the existing agri-environmental policy (and especially the context of novel contractual solutions) across the different countries. However, preparatory interviews, desk research, and the introductory part of the workshop gave a chance to outline the policy content as well.
Most workshops were not attended only by policymakers and experts, but also representatives and on-the-spot practitioners of the CILs were present to introduce the focus of their lab and to sum up the major lessons learnt from the SWOT analysis of the four contract types collated by the CILs (see Milestone MS3.2). This opportunity for cross-scale interaction between CILs and PILs were considered by participants as an important added value of the Contracts2.0 project as it could create a more direct and hands-on relationship between policy planning and on the ground experiences, and by this, it could foster deeper reflection and social learning as part of the policy planning process (e.g. economical, ecological and social backgrounds). As participants in some of the workshops realized, real-life experiences of implementing certain policies at the local level might be highly different from the assumptions (and intentions) of policy makers at higher administrative levels. 1.4. Major information sources used in the deliverable
PIL workshops PIL workshops were organized in 9 countries between January and February 2020 (see Table 1 for details). The workshops lasted for 2.5 to 4 hours, and mostly included a joint lunch or dinner. The number of participants was highly variable, ranging from 4 to approximately 50. Post-its, flip over charts and printed hand-outs were used to help participants to note their ideas. Additionally, workshop facilitators took notes, and in some cases voice recorders were also used. In most cases the PIL works at the national level (i.e. national level policies are discussed and aimed to improve), but in countries where regions have independence in launching specific agri-environmental measures and regulations, the PILs integrate this regional and national level focus within their PIL composition and discussion (Belgium, France, Germany, Italy, Spain and UK). This was reflected in the first workshops. While most of the PIL reports discussed national level regulations and initiatives at least partially, there were some PIL workshops where regional initiatives and measures were in the focus.
According to the PIL reports the atmosphere of the meetings was constructive, the organizers and the participants received good feedback to their questions. The present stakeholders were keen to contribute and there was plenty of discussion. Some good ideas for the future direction of the project emerged. In cases where both CIL and PIL members were present there were many interactions among the locals and the members of PIL. In several PILs, participants encouraged the organizers to send the results as input for the future CAP framework as soon as possible to the relevant EU institutions. During the next round of PIL meetings we have to meet the high expectations of the members in most of the PILs, and to persuade the less enthusiastic, or missing stakeholders.
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Table 4: List of the workshops of the Policy Innovation Labs
PILs by home country Date and place of the first No. of participants CIL members workshop(s) present
Belgium (Flanders) 22nd May and 24th February 2020 4 (+ 9 interviews) No (Brussels)
Denmark 14th January (Copenhagen)1 approx. 50 No
France (Hautes-Pyrénées) 31st January (Toulouse) 13 (2 online) Yes
Germany (North Rhine- 22nd January (Berlin) 27 Yes Westphalia)
Hungary 21st January (Budapest) 7 (+ 3 interviews) Yes
Italy (Tuscany) 29th January (Firenze) 13 Yes
Netherlands 15th (Limburg) and 27th January 9 in Limburg and 13 in Yes (Groningen) Groningen
Spain (Madrid) 21st January (Madrid) 12 Yes
UK (England) 25th February (Cumbria) 7 Yes
In most cases the reporting template was filled by the PIL coordinators based on the discussions, while in some cases participants themselves added textual input or commented on the filled template later on. As the reporting template collected information from PILs in a highly structured format, the comparative analysis used a simple qualitative content analysis approach. Reporting templates were carefully read and when necessary clarified with the authors, then textual answers were colour coded using either in vivo or technical codes. In the second step, codes were grouped into categories (sometimes subcategories were also used to better characterize a given category) and the relationship between codes and categories were checked. At this step, codes and their categorization were refined, and in some cases new codes were introduced. Additionally to this qualitative analysis, we counted the frequencies of codes and categories for each country and for the four contract types.
Preparatory interviews In some countries PIL coordinators started the process of establishing the PILs through personal contacts and informal interviews with relevant policy makers, or participated at policy workshops or conferences to familiarize themselves with the policy context. To be able to record the impressions gained through these initial steps, we added a section on existing agri-environmental measures to the reporting template prepared for the PIL workshops where information (where existed) could be summarized.
1 The workshop in Denmark was organized by the Ministry of Environment and Food as part of their preparation of the national CAP strategy.
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Literature review We conducted a general literature search on the Science Direct database for the period of 2015-2020 with the following search string: agri-environmental scheme* AND agri-environmental measure* AND Common Agricultural Policy AND (effectiveness OR impacts). The search resulted in a total number of 1314 hits. Book chapters and encyclopaedia entries were filtered out. The remaining review papers and scientific papers (1179 hits altogether) were sorted according to relevance, and the first 100 abstracts were screened. Papers focusing on Europe, having a clear link to policy making or policy analysis, and building on empirical data were selected for analysis. In addition, the reference list of a selected recent review document (the EKLIPSE report on the CAP, see Brown et al. 2019) was used to start a snowball sampling to look for further relevant papers. In the second phase of the literature review, we conducted targeted searches for the four novel contract types using again the ScienceDirect database. Later in the project we plan to continue our literature review and develop a systematic review based on peer reviewed scientific papers.
2. A BRIEF OVERVIEW OF THE POLICY LANDSCAPE
2.1. Agri-environmental-climate measures in the CAP
The European Union has linked a multitude of objectives with measures and finances under the CAP for over 60 years. In a nutshell, the CAP intends to secure food and nutrition of 500 million EU citizens, ensure an adequate standard of living for the agricultural population, protect the environment and nature, and preserve the European agricultural landscape. The CAP has been continuously adapted to new challenges over the past six decades. For example, since 2005 Cross Compliance obliges a large number of EU agricultural payments to comply with requirements in the areas of environmental protection, climate protection, good ecological condition of agricultural land, health of humans, animals and plants as well as animal welfare. Today’s direct payments from the EU budget intend, among other things, to compensate for higher production costs and lost revenue that farmers in the EU Member States face as a result of these high standards compared to their competitors in other countries outside the EU (see HFFA Research Paper 05/2017, URL2). In the context of the CAP, the agri-environmental measures mentioned in the heading are traditionally addressed in the nationally or regionally adapted Rural Development Programmes (RDPs) financed by the European Agricultural Fund for Rural Development (EAFRD) – generally Pillar II of CAP. In the current period 2014-2020, in addition to the Cross Compliance requirements, Greening (payments for agricultural practices beneficial for the climate and the environment) became a new element as a condition for receiving direct payments financed by the European Agricultural Guarantee Fund – generally Pillar I of CAP. Amongst others, CAP is also providing financial support for measures favouring biodiversity both in Pillar I and Pillar II in the period between 2014-2020. In Pillar I the Greening measures (ecological focus areas, crop diversification, permanent grassland) aim to ensure that farmers who receive financial support from the EU co-produce environmental and climate public goods during their regular farming activities. Additionally, Pillar II RDPs also support the provision of environmental and climate benefits through Agri-Environmental-Climate Measures (AECMs). Contrary to the Greening measures, RDPs are
©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 9 / 39 D 15 / 4.2 implemented and co-financed by Member States in accordance with national or regional priorities and decisions. Therefore, measures within RDPs are more flexible and adapted to regional conditions. The introduction of Greening in Pillar I meant that on a yearly basis well over 8 million hectares of agricultural land are used with a special environmental impact (COM report 03/2017, URL3). Regarding the protection of habitats, landscapes, biodiversity and water, other reports come to generally constructive conclusions in the evaluation of the period 2014-2020 (Alliance Environnement 2019). For Contracts2.0 project, this is a fruitful ground to contribute to the further development and improvement of AECMs. The same Alliance Environment report on the environmental impacts of the current CAP also found out that AECMs are effective to conserve semi-natural habitats, although suffer from budget constraints and limited farmers’ willingness to participate. While flexibility could be an advantage in the sense that it allows tailoring the measures to the specific national / regional / agronomical context, Greening measures from certain points of view were found to fail in full delivering the expected environmental impacts (Brown et al. 2019). Brown and colleagues highlighted that out of the 13 different measures, analyzed in their systematic analysis, only 6 proved to have positive environmental effect (and only half of them have overly positive impact), 4 measures provide unclear or highly context-dependent benefits, and the rest have neutral or negative impact on biodiversity (Brown et al. 2019). In the post-2020 CAP’s new green architecture eco-schemes - voluntary and annual measures for farmers fully EU financed under Pillar I - appear as a novel scheme with a strong environmental focus (Fig. 2).
Fig. 2: Comparison of key aspects of eco-schemes in CAP Pillar I and agri-environmental-climate commitments in CAP Pillar II (source of Fig. 2: URL4)
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Mainly depending on the Member States decision on the Multiannual Financial Framework of the European Union for 2021 to 2027, the post-2020 CAP is still under negotiation, and the existing legal framework remains in use for the interim period (at least until the end of 2021 counting with a 1 year extension period (URL5, URL6). The European Court of Auditors highlighted that this delay in the adoption could hold back the implementation of new elements (URL7, URL8). On the other hand, the extension could provide an opportunity to align the post-2020 CAP with the Commission's proposed European Green Deal ambitions. In addition, it can currently be assumed that the priorities of different policies including financial implications in the European Union will change to an unforeseeable extent due to the effects of the COVID-19 pandemic.
2.2. Result-based contracts
Result-based approaches to AECMs have emerged in the EU from the mid-2000ies, mainly in the form of pilot or regional-level initiatives, or as add-ons to action-based measures (Burton and Schwarz 2013). In practice, result-based and action-based contracts form a continuum where hybrid approaches exist between the two endpoints, mixing elements of both (Herzon et al. 2018). The key feature of result-based contracts is that they pay farmers with incentives for achieving the pre-defined set of ecological objectives instead of for carrying out specific management actions. As result-based contracts are outcome-focused, they allow more flexibility and experimentation for farmers, that is, farmers can better adapt their daily management activity to local environmental, weather and agronomic conditions, and can use their own local knowledge and experience in farming (Burton and Schwarz 2013; Prager et al. 2020). Result-based measures also proved to be a cost-effective instrument, although transaction costs might be higher than in the case of action-based measures and therefore should be calculated into the payment (Matzdorf and Lorenz 2010). The three most critical points for the successful design of result-based contracts are 1) clearly defined targets, 2) robust indicators to measure ecological outcomes, and 3) the socio-economic context such as income implications (Herzon et al. 2018). A recent paper analyzed result-based contracts from a legal point of view (Saba 2017), and found that existing agri-environmental contracts are based on asymmetric, imperfect and hidden information which increases the risk of moral hazards, therefore public authorities usually opt for strong, top-down legal structures with little flexibility and with many overarching administrative requirements (e.g. Member States’ gold plating). A result-based approach, however, assumes that within one single agri- environmental measure several different, unique contracts - adapting to local conditions and practices - are created and signed bi-laterally. The paper argues that increased risks (associated with a partial lack of control on outcome by the farmers) can be partially managed in result-based contracts with a stronger collaborative element (co-design of contracts) and increased adaptiveness, tolerances and entrepreneurial degrees of freedom (if original contractual terms are revised from time to time, shorter time frames are applied). Such a contractual model requires flexibilities for entrepreneurial approaches from farmers, and a multi-actor and adaptive governance from public authorities (Hiedanpää and Borgström 2014). While in some countries such requirements can be met relatively easily, concerns emerge whether and to what extent the current institutional system and governance processes can accommodate the result-based approach (Birge et al. 2017).
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Some selected examples of result-based contracts:
In Contracts2.0 result-based contracts are already used by some practice partners (e.g. in Belgium, Denmark, or the UK - see also in the next sections) Germany was one of the first countries where result-based contracts have been applied at the regional level. One of the oldest and most well-known examples is the result-based measure for species rich grasslands in Baden-Württemberg. According to an IEEP report (Russi, Margue, and Keenleyside 2014), this measure helped to avoid land abandonment and agricultural intensification and contributed to increased knowledge and awareness. However, to widen farmers’ participation in the contracts, the payment level was advised to be increased also taken into account the changing market conditions. Adequate financial incentives – in addition to reimbursing costs and lost returns – are crucial to attract farmers. Several pilots were run recently in the EU (in Ireland, UK, Spain, Austria, Romania, among others) which experimented with result-based contracts. Lessons learnt, incl. a handbook on result-based contracts, collection of case studies, and videos of best practices can be accessed online: URL9 While result-based contracts are mostly discussed in the literature as alternatives to action- based payments in publicly funded agri-environmental contracts, private contracts can also apply a result-based approach. For instance, (Wezel et al. 2016) analyzes a result-based payment scheme for water catchment management in Germany (Augsburg region) offered by the municipal water supplying company to volunteering farmers, on top of existing action- based measures. The result indicator is the nitrate-N concentration in the soil, which is monitored on a yearly basis (and is compared to a reference value), and remuneration is paid if the nitrogen concentration in a farmer’s parcels is lower than the reference value. According to the study approx. 60% of farmers thought that nitrate level is a good and reliable indicator for assessing the results and 82% thought that the payment is sufficient. Reasons behind this relatively high level of acceptance were found to be linked to a long-term approach and to flexible and integrated governance of the payment scheme.
2.3. Collective contracts
The concept of collective action in natural resource management originates from the 90ies (Ostrom 1990), but the connections between the CAP, biodiversity conservation and collective action are still less intensively studied topics according to our search on Science Direct. Using the terms "collective action" AND "agri-environmental measures" between 1990 and 2020 we got 48 results, using the terms "collective action" AND "agri-environmental-climate measures" we had only one result (overlapping with the first search). According to the results collective actions without other measures have a leading role in cases linked to water- or biodiversity management, and in landscape-scale practices, like wetland or habitat management. These activities can be seen as examples of resource management. Beside of it, collective actions are used together with other forms of contracts, according to our search results. As D1.1 of the project on concept notes also presented, collective action has two main forms: cooperation and coordination (see e.g. Prager, 2015). From a more theoretical point of view,
©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 12 / 39 D 15 / 4.2 cooperation can be considered a bottom-up initiative among different stakeholders, while coordination is usually a top-down initiative. As Praeger points out, both approaches can be useful depending on the specificity of the situation. As collective actions are most widespread in resource management, the factors influencing the success and failure of such initiatives can be listed using Ostrom’s work (Ostrom 2006). She argues that the favourable resource attributes and the favourable attributes of the stakeholders can contribute to the successful collective natural resource management. Favourable resource attributes (characterizing the whole system) are the following: 1) feasibility and predictability of improving the resource, 2) accepted and measurable indicators on the quality of the resource (incl. optimal administrative and contractual conditions), 3) spatial extent of the resource. Favourable stakeholder attributes (characterizing individual actors, such as farmers) are the following: 1) how evidently the resource influence the economic vitality (income and identity) of the users, 2) whether there is a common understanding of how the resource system operates, what are users’ needs, and how their activity affect the resource system, and 3) the degree of trust and reciprocity, among users (Megyesi and Mike 2016). The attributes of the group of the stakeholders (users) and the wider policy environment also increases the success of the collective initiatives as (Megyesi and Mike 2016) argued. Influencing group attributes are the following: the degree of autonomy of users to create the rules of use, the prior organisational experience and local leadership of the users, the heterogeneity of the group, the characteristics of information flow and decision-making, the mode of monitoring and of sanctioning, while the wider policy environment is more favourable if it ensures autonomy to develop the rules of the group, to define group membership, but at the same time creating stable and long-term regulative frameworks. Collective action is in most cases not in the centre of agri-environmental measures yet, although collective contracts are supposed to help achieve landscape level outcomes more easily. The collective contract is rarely used in itself, in most cases it is combined with other approaches. Selected examples for collective contracts:
The main European examples of collective action based contracts for agri-environmental benefits are the practical experiences from the Dutch environmental cooperatives (e.g. see URL10), and from the German Nature Protection Foundations (see URL11, URL12, URL13). Similar contract types can be found also among several action partners of the Contracts 2.0 project partners. Some of these cases demonstrate that collective action-based contracts have a supplementary role in agri-environmental initiatives: in the Hautes-Pyrénées the contracts aim at maintain existing traditions of collective grazing and improving the natural habitats. BoerenNatur (see URL14) is hosting different regional examples of collective action based contract types in the Contracts 2.0 project. In this case the CILs are aiming at developing measures to improve collaboration among the land users. But collective and cooperative approaches are important also in other Contracts2.0 regions: e.g. the Flanders, the Italian (Garfagnaga), the Danish (Bornholm), the North Rhine-Westphalian (two regional Nature Protection Foundations, see URL15, URL16) field cases. Collective action has a different role and different goals in the analysed cases.
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2.4. Land tenure contracts
In simple terms, land tenure systems determine who can use what resources for how long, and under what conditions (FAO 2002). As such, all agri-environmental commitments fixed by contracts are an integral component of land tenure. However, in Contracts2.0 we focus on three aspects: 1. In cases where the manger does not own the farmland:
Can environmental and climate objectives be integrated in the contract between the owner and the manager of the farmland? Do agri-environmental-climate contracts cater for all farmers regardless of land ownership? 2. In cases where farmland is traded:
Can environmental and climate objectives be integrated in the contract between the seller and the buyer of the farmland? 3. In cases where the specific land tenure system supports specific environmental services
Can specific contracts be design to support the land tenure systems? Do agri-environmental-climate contracts cater for these land tenure systems? Farming in the European Union is highly complex regarding ownership structure. Half of the agricultural area of the European Union is not managed by the owner. In 2013, 52 % of the utilized agricultural area was managed by the owner, 43 % by tenants and 5 % in other land tenure systems (e.g. shared farming or other modes) (Farm Structural Survey 2017). The trend is a decline in the share of the agricultural area managed by the owner, for example from 56 % in 2007 to 52 % in 2013. The share of the agricultural land managed by the owner varies a lot across the member States from 21 % in France to 82% in Poland indicating that the land tenure characteristics are linked to different national and regional histories, social conventions and legal institutions. Recently also land grabbing (i.e. land acquisition by foreign capital) has been recognized as a limited but creeping phenomenon in the European Union, challenging the European Model of Farming (European Parliament 2015). In relation to agri-environment-climate contracts land tenure issues are also a factor that potentially can affect the participation in agri-environmental contracts. Farmers with a high share of their holding as freehold property in a EU-wide study were more likely to enter into agri-environmental contracts (Wilson and Hart 2000). Long term contracts are less likely to be agreed if a high proportion of land on the farm is rented (Defrancesco et al. 2008; Ruto and Garrod 2009). Tenure issues have also been reported to affect delivery of environmental in special land tenure systems such as on common lands, crofting or in transhumance systems (Garrido et al. 2017; Gwyn Jones 2012; Knowler and Bradshaw 2007; Shucksmith and Rønningen 2011). Wilson and Hart (2000) also provided interview information, which revealed that agri-environmental contracts in the EU fail to consider the special needs of tenant or leasehold farmers. The farmers have different landscape management roles as land owner, as producer and as citizens that in combination shapes their farming practices and landscape related actions (Primdahl, Kristensen, and Busck 2013). A review stated that conventional wisdom suggests that owned land is better maintained by farmers than leased land, but most sources found no significant relationship Selected examples of contracts applying the land tenure approach:
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In Denmark, the Nature Agency under the Ministry of Environment and Food rents out farmland under the condition that it is managed extensively. Schemes on extensive farmland management in Germany linked to Biodiversity off-setting. MoorFutures in Germany on storage of carbon in peatlands. The permanence is secured by prescribed water levels under the Water Law; entries in the land register to secure permanence of the required water levels; and/or the purchase of land for restoration. In Denmark support for afforestation is given under the condition that the forest is placed under protection eternally.
2.5. Value chain contracts
The term value-chain originates from Porter and used to describe a series of value-added activities (Porter 2001). The value chain approach seems to be the least popular contract type among AECM, if we search for the term ‘value-chain’ and ‘agri-environmental measures’. Between 1990 and 2020 we got 13 results, using the terms ‘value chain’ AND ‘agri-environmental-climate measures’ we had no result. Most probably it does not mean that the value chain approach is neglected comparing to the other three analysed approach, but the term value-chain is not used in the AECM. The search on ‘value- chains” AND the term “Common Agricultural Policy” resulted 236 results. The search results show that it is commonly used in food network food policy and supply chain analysis related to the Common Agricultural Policy, thus, although it is not obvious, it is linked to AECM through different food networks. There is another type of value-chains, not explicitly, but inherently linked to AECM, the organic sector, one of the most precisely regulated and developed value-chains of the CAP. The search on the term ‘organic farming’ AND ‘agri-environmental measures’ gives 177 results. To sum up, value chains are important in AECM and the CAP and some forms of value chains can be used to develop new contractual models. Value-chain approach is in most cases not in the centre of agri-environmental measures, as our search showed, although both the food value chain and the organic value-chain have an important role in the CAP. The problems of food value chains are discussed in a recent report (URL17) , arguing that the EU food supply chain is characterized by increased concentration of downstream stages and imbalanced distribution of value-added, by asymmetric price transmission and by bargaining imbalance, which may lead to unfair trade prices. Local food systems, alternative, and short food supply chains are possible answers to such challenges (Kneafsey et al. 2008; Morgan, Marsden, and Murdoch 2008). Although organic farming is one of the key element of AECM, and inherently belong to value chains, it has an own agenda independent from the contractual approach. Selected examples: There are three CILs in the Contracts 2.0 project engaged in using the value chain approach: the Danish (Bornholm), the Hungarian (Őrség) and the HIPP (Germany). Out of them one, the HIPP case-study is currently using the value-chain approach. The baby food producer company integrates thousands of organic farmers across Europe. Beside of building on organic value-chain also a result-based approach is used, to preserve biodiversity and soil quality. In the Őrség case, value-chain approach will be used to support the result-based contracts by strengthening market position of farmers and their products.
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3. CURRENTLY AVAILABLE AGRI-ENVIRONMENTAL MEASURES FROM A NATIONAL PERSPECTIVE
3.1. Initial screening of the national policy landscape (June 2019) Engaging relevant decision-makers and conceptualizing the policy landscape around the new contractual models started already at the very beginning of the project. In most participating countries, project partners approached relevant decision makers even before the official start date of the project to better understand their research needs and to align their demands with the objectives and scope of the project. The major learning points from these preparatory meetings were shared with the whole consortium in a policy round table discussion during the project kick-off meeting (Berlin, 13-06-2019). The central question of the roundtable was: How negotiations on the post-2020 CAP are going on in the different countries, nearly one year after the European Commission presented its legislative proposals (see COM 06/2018, URL18). However, knowing that there were still many uncertainties with the post-2020 CAP, and also being aware that some of the represented countries had had governmental elections recently, the discussion was open to raise other relevant issues, such as the main expectations raised towards the future CAP, its proposed new green architecture and the general context of agri(-environmental) policy in the countries being represented in the Contracts2.0 project. The discussion highlighted that the countries involved in Contracts2.0 Policy Innovation Labs (see figure 1) were at different preparatory stages especially linked to their work on future National CAP Strategic Plans. Working groups or platforms to support the planning process were established at national level, although countries followed different routes to engage stakeholders. Also, there are various ways how countries approach future targets of EU agricultural payments and the corresponding ratio of Pillar I and Pillar II budget allocations. While there seems to be a common ground for general support towards the CAP reform (e.g. in terms of acknowledging its stronger focus on environmental impacts), in June 2019 most of the countries were unsure how to implement the new measures. Concerns and questions were raised especially in relation to annual measures under eco-schemes within Pillar I. From the first screening it was also obvious that at this stage in most countries the four innovative contract types being in focus of Contracts2.0 project were on the table yet for the upcoming CAP to a limited extent. Some of the key questions towards the post-2020 CAP and the ongoing negotiations were reported as follows:
Flexibility: Is regional differentiation possible / useful to create more tailor-made incentives and better fit to the natural environment while keeping the focus also on CAP simplification? Policy coherence: How to create coherence across existing and new CAP measures and other agri-environmental, nature conservation, and climate measures? Budget: While the ambitions and challenges for the post-2020 CAP are growing the budget decreases - how to avoid or mitigate this tension? Target farmers: How to deal with the heterogeneity of farmers across regions (i.e. different economical, ecological, social backgrounds of farmers; large-scale farmers vs. small-scale farmers; land abandonment and renewal of the farmer generation across Europe; reconciliation of different societal interests on-the-spot)?
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3.2. Agri-environmental measures used in different regions and countries The PIL workshops engaged policy decision makers, public administrators and experts in the analysis of the barriers and opportunities for new contractual solutions. As a starting point, a general overview of the current policy instruments was drafted, either via an interactive brainstorming session or via a more structured, presentation-style introduction. Since the facilitating approach of how this information was presented/captured during the workshop, the reports became quite diverse in terms of how many instruments they introduce and how deeply they describe them. While based on this information, we cannot draw a detailed picture of all the agri-environmental measures currently used in the studied countries, the data still allows us to make a general overview of what kind of instruments are used where, and if there are substantial experiences with any of the new contract types. This overview also provides a reference frame to interpret the barriers and opportunities analyzed in the next section. Agri-environmental-climate measures are diverse both across and within countries: EU funds are mixed with different national/regional instruments and private initiatives (i.e. market based value chain approaches). Considering those countries which participate in Contracts2.0 with PILs, we can differentiate between Belgium, France, Germany, Italy, Spain and the UK where AECMs are designed and implemented at the sub-national level, and Denmark, Hungary and the Netherlands where the national policy context is decisive. Hereby we give a very brief summary of how AECMs in different PILs were characterized:
Belgium, Flanders: action-based contracts are in majority. There are currently no predominant result-based contracts, albeit a few have result-based features. Regarding the collective contract type, it is again not a mainstream, although ABC Eco2 (the Flemish action partner) manages approximately 30 collectives within their specific local contexts. Denmark: action-based contracts are applied for the management of permanent grasslands and newly established forests. Other measures combine more mainstream approaches with new contract types, such as contracts for organic farming (contains elements of the value chain approach), and incentives for hedgerow planting, wetland management or nitrogen regulation (combining collective and result-based elements). A new measure for multifunctional land consolidation is based on the land tenure approach, but its effectiveness is not known yet. France, Hautes-Pyrénées: there is a huge diversity of available schemes and measures across the country and the regions, including several examples for result-based, collective, land tenure and value-chain approaches. Available measures are seen as not very effective in terms of incentivising sustainable grassland management. However, those measures which combine various elements (e.g. collective and result-based, value chain and result-based, or value chain, collective and result-based) prove to be more impactful. Germany, North Rhine-Westphalia: Background note: German AECM programs are implemented mainly by 13 RDPs for which the German ‘Länder’ are responsible of design and implementation. Some German ‘Länder’ have a very diverse scheme-portfolio, others present a more concise set of measures depending on their regional conditions and priorities. North Rhine-Westphalia: This RDP offers 6 different measures (action-based). Most frequent schemes (according to acreage under cultivation) are diverse crop rotation, and extensive grassland management (partly results-based implementation in other German ‘Länder’ RDPs),
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as well as some target-specific agreements for land use. Additional, less frequently chosen AECMs include the cultivation of catch crops, flower strips, riparian and buffer strips. Italy, Tuscany: biodiversity conservation in farmlands is interlinked with the support of traditional production methods and local land races. Three specific measures for biodiversity conservation were implemented between 2014-2020, the conservation of animal genetic resources, the cultivation of local varieties, and the conservation and sustainable use of genetic resources in agriculture. The result-based approach is applied in biodiversity conservation measures for custodian farmers, but there are also working examples for collective and value-chain approaches. Hungary: action-based payments are the mainstream incentives in current AECM. Land tenure contracts exist in areas protected as National Parks, where the tenure contract usually contains specific measures concerning the sustainable use of land and biodiversity. Collective contracts are not working effectively, while the success of value chain approaches highly depends on existing demand and institutional setup. Result-based contracts are marginal and appear only in combination with action-based measures in high nature value areas. Netherlands: collective contract is the default contract type for CAP agri-environmental measures. Land tenure contracts show a huge variability and can be implemented by the State Forestry, private companies, or municipalities. Also, there is a huge diversity of value chain approaches, ranging from more top-down (managed by a processing company) to more locally rooted (regional specific contracts) approaches. Biodiversity monitoring for arable farming is implemented currently in a start-up phase. Spain, Madrid region: there are many different measures available, combining the EU CAP support and regional incentives. Land tenure based contractual models are applied in terms of land stewardship agreements, and proved to be well-functioning in some symbolic cases for organic agriculture and for the conservation of agrobiodiversity. Collective and value-chain based contracts are used less frequently, while result-based payments are not used at all. However, there is a high interest to know more about possible implementation. UK, England: the Countryside Stewardship Scheme is a complex multi-objective scheme which addresses environmental issues primarily at the level of the individual holding. Collective approaches include management agreements with groups of interested parties to manage common land, and individual agreements coordinated to deliver against landscape-scale objectives (in some cases with support from the Facilitation Fund). Action-based management is targeted at key environmental features, but the current ‘Tests and Trials’ programme looking to a post-CAP scenario is experimenting with both collective and result-based measures. Where land tenure and value chain approaches have been applied it is typically by the non- governmental and private sector.
Table 2 compares the country and regions specific experiences with the four novel contractual models by checking how many different contract examples (n) were listed to each contract type. As mentioned above, this is not a total list of applied schemes and measures, but a well-informed selection of existing instruments based on the expert knowledge of PIL participants. Although the table lists only the four novel contract types assessed in Contracts2.0, it is important to note that most PILs mentioned other
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- i.e. action-based - measures as important existing instruments in their countries or specific regions (e.g. German PIL North Rhine-Westphalia). Table 5: Experiences with novel contracts in PILs
Region/Type of contract Results-based Collective Land tenure Value chain Belgium (Flanders) few examples few examples n.d. n.d. Denmark n=2 n=2 n=1 n=1 France (Hautes-Pyrénées) n=4 n=7 n=2 n=2 Germany (North Rhine-Westphalia) n=1 n.d. n.d. n.d. Hungary n=3 n=4 n=2 n=4 Italy (Tuscany) n=1 n=1 n=1 n.d. Netherlands (Limburg + Groningen) n.d. n=1 n=1 n=3 Spain (Madrid) n.d. n=2 n=6 n=2 UK (England) n=1 n=4 few examples few examples
total n=12 total n=21 total n=13 total n=12 total PIL=7 total PIL=8 total PIL=7 total PIL=6
As the table suggests, there is no substantial difference among the mentions of the four novel contract types: all contracts are already in use in at least two-thirds of the studied countries or regions. However, in some cases novel contracts might only be used as pilots and there is no guarantee yet for full implementation (e.g. in the case of UK). None of the PILs reported that one single novel contract type dominated the policy landscape. The biggest number of individual examples were listed for collective contracts (21 different examples in 8 PILs). This suggests that collective contracts are implemented relatively widely and in diverse forms. Alternatively, it might also indicate that collective approaches are more loosely defined, therefore there is a wider range of contracts that can be categorized as belonging to this type. The result-based and land tenure contract was reported in 7 different PILs as to be used (or some elements of it) in combination with other approaches (rarely used in itself). In these 7 PILs altogether 12 independent examples were listed for result based contracts, and 13 examples for land tenure contracts, which shows less diversity within countries/regions than collective contracts. Value chain approaches are similarly frequent: 12 different examples were mentioned in 6 PILs, however, we suppose there is a much bigger number of value chain approaches - and consequently, a higher heterogeneity within this category - which we could not grasp from the PIL workshops. The effectiveness of the different contract types was assessed numerically in a few PILs but not everywhere, therefore it is impossible to make a general conclusion along this aspect. Based on this information we can say that collective approaches were assessed most often (in 6 PILs) and were considered mainly as a measure with medium or high effectiveness. The only PIL where the collective approach was considered to have limited effectiveness was the Hungarian. Result-based and land tenure contracts were scored only in four PILs, and they were also perceived as highly or moderately effective. The value chain approach, assessed in 5 PILs, was considered as a moderately or weakly
©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 19 / 39 D 15 / 4.2 effective measure. According to the textual analysis, these medium scores indicate that all different contract types have their individual strengths and weaknesses, which might be different from country to country, region to region. Analyzing the barriers which hinder the implementation of these contracts has therefore key importance to understanding how the different contracts work in real life context and what are the crucial points for design.
3.3. Barriers identified in the current policy landscape Existing barriers which limit the implementation of novel contracts were listed in each PIL workshop through a brainstorming exercise. During the coding and categorization phase of the content analysis, we identified altogether 22 major barriers which we grouped into 6 key categories. The explanation of each barrier (each code) is presented in Annex 1, while a table including the frequency of each code for each PIL can be found in Annex 2. None of the PILs mentioned all the six main categories (implementation of AECM, resources, policy context, cultural factors, information flow, agricultural system characteristics) or the 22 codes in the same time - which shows that there is substantial regional heterogeneity across European countries in terms of which factors hinder the implementation of agri-environmental measures. In addition, it can be assumed that further work in the Contracts2.0 project will lead to further insights into real barriers or obstacles. The biggest category of barriers, also accounting for the highest frequency, is related to the practical implementation of agri-environmental measures. This category is split up into two sub-categories, the first one brings together four codes which focus on institutional challenges (i.e. institutional misfit, land sparing vs. land sharing, bureaucracy, and spatial diversity / complexity), while the second one integrates another four codes focusing on the key questions of designing effective AECM (i.e. duration, payment vehicle and degree of incentive, robust and cost-effective measurement, and relationship to climate change and natural hazards). Codes belonging to this category were mentioned in 8 PILs (only the Italian PIL did not list any barriers related to the implementation of AECMs), and show quite a large heterogeneity across the studied regions/countries: only two codes were mentioned in at least half of the PILs (robust measurement and payment vehicle), others appeared only sporadically. Interesting to note that while bureaucracy was mentioned only in four PILs, its total frequency is the highest within this category. This shows that the bureaucratic institutional environment, although not typical everywhere, where it exists, has a significant impact on how AECMs are implemented and accepted. The availability of resources is a crucial factor for the effective implementation of AECMs. This is reinforced by the fact that our second most frequently mentioned category was resources, which also includes financial and land resources, as well as human resources both at the level of public administration and practitioners/farmers/land managers. While budgetary and investment issues are quite common (mentioned in 7 PILs), land and human resources were mentioned only in a few PILs. Denmark is the only country where none of the resource constraints were mentioned in the first PIL workshop, but it is also important to note that there were no PILs where more than two types of resources were lacking. The overall policy context is directly linked to the institutional challenges related to the implementation of AECM. Policy context as a category was the third most frequently mentioned one,
©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 20 / 39 D 15 / 4.2 being addressed in 6 out of the 9 studied countries. Policy inertia and lack of vision leads to a limited predictability at the policy level, which also influences how much farmers and other stakeholders trust the institutional system. The multi-sectoral and multi-level nature of agricultural policy, also represented in some countries by the huge diversity and complexity of available policy measures, can result in conflicting interests and unclear structures of power and responsibility. Setting up clear and jointly shared goals (e.g. for national or regional levels) as well as responsibilities are real challenges in such an environment. Barriers related to the policy context are not present everywhere: in three PILs no such barriers were listed (Denmark, Germany, Italy). However, where they exist, they usually go hand in hand - except the French PIL, where only huge diversity and complexity of available measures was mentioned - the rest of the PILs listed three different policy related barriers at the same time. Cultural factors limiting the effective implementation of AECMs were mentioned in 7 PILs, and seem to follow the previous category of codes: there is a higher frequency of codes referring to limiting cultural factors in places where the policy context is highly challenging (3 codes of the policy context category were mentioned). Here we distinguished two codes: social norms and acceptance (here referring to the general social perceptions of what is considered a good agricultural practice, whether rules should be followed or poaching is accepted etc.) was more frequently mentioned, while trust and collaboration (among farmers, but also between farmers and public administration) was less frequent, but still mentioned in four countries as a key issue having a negative impact on farmers’ participation in AECMs, and especially in measures which require wider collaboration and networking. The category called information flow consists of two codes, lack of communication and engagement, and lack of knowledge and information. These are two interrelated codes, the first one referring to the process and the second one referring to the content of communication, primarily between farmers and the public bodies. This category seems to be interlinked with human resources at the level of public administration, which highlights that more efficient communication might require a more personal relationship with farmers and a stronger advisory role on behalf of the public authorities. Finally, there are specific characteristics of the agricultural system which might create further - and highly context specific - barriers for the implementation of AECMs. Such specificities range from the ageing of farmers to increased weed pressure or to the competition for land between agriculture and the housing sector, and are highly heterogeneous across countries. Table 3 lists the barriers in a decreasing order of how many PILs mentioned them and compares the four main contract types to identify characteristic patterns. Table 6: Existing barriers for the four novel contract types
Barriers Result- Collective Land Value No. of PILs based tenure chain mentioning Implementation of AECMs (institutional challenges and design) 30 36 18 15 8 Institutional misfit 1 4 0 0 3 Land sparing vs. land sharing 1 1 1 1 1 Bureaucracy, rigid timing and requirements 8 11 8 7 4 Spatial diversity and complexity 1 3 2 2 3
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Duration 0 1 1 0 1 Payment vehicle / Incentives 5 7 2 2 5 Robust and cost-effective measurement 10 5 1 0 6 Consider climate change and natural hazards 4 4 3 3 4 Resources (financial, land and human resources) 14 21 20 9 8 Budget, investments 6 11 12 4 7 Land property rights and tenure 0 1 3 0 3 Work overload 1 2 0 0 2 Availability of human resources in public administration / advisory 7 7 5 5 3 Policy context 10 19 11 10 6 Policy inertia / lack of vision 5 7 5 4 5 Unpredictability at the policy level 2 2 2 2 2 Multiscale and multisectoral governance 1 4 2 2 4 Diversity of policy measures / tools 1 2 0 0 2 Goal setting 1 4 2 2 3 Cultural factors 7 13 10 8 7 Social norms and acceptance 7 10 9 7 6 Trust and collaboration 0 3 1 1 4 Information flow 7 12 8 5 7 Communication and engagement 3 7 2 2 5 Knowledge and information 4 5 6 3 5 Agricultural system characteristics 9 9 7 7 5 Agricultural system characteristics 9 9 7 7 5
Total frequency of barriers per contract types 77 110 74 54 Legend: numbers refers to how many codes were identified for a given barrier in the four contract types. The last column shows how many PILs listed the given barrier out of the nine countries/regions involved - main categories of barriers are listed in a decreasing order. The rows in medium grey and bold indicate the main categories and the cumulative frequencies within the given category. The rows highlighted with blue indicate barriers which characterize each contract type relatively homogeneously (difference between the lowest and highest no. of frequencies across contract types is no more than 2). The rows / cells coloured with red indicate barriers which are highly frequent for some contract types but not typical (rarely mentioned) for the others. As the table shows, budget related challenges, social norms, and the technicalities of how to design robust and cost-effective measurement are the most widespread across Europe as these are mentioned in 7 or 6 PILs out of 9. There are six barriers which are almost equally hindering for all the four contract types: the specific national/regional characteristics of the agricultural system, the availability of human resources, the unpredictability at the policy level, and three barriers related to the practical implementation of AECMs (considering climate change and natural hazards, spatial
©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 22 / 39 D 15 / 4.2 heterogeneity and complexity, and balancing between the land sparing and land sharing approach). On the other hand, we can identify three barriers which seem to be highly specific for one or two contract types but not influencing so much the implementation of others. These are the budget related barriers, which can be considered typical for collective and land tenure based contracts, the technical design of AECM related to robust and cost-effective measurement, which seems to be closely related to result-based contracts, and the challenges of communication and engagement, which looks to be specific for collective contracts. Comparing the four contract types, collective contracts were attributed with all the 22 different barriers, and this category is the one where the highest number of individual barriers were coded. Result-based and land tenure contracts are in the middle in terms of the number of different barriers identified, while value chain approaches look to be the less challenging ones as this category collected the fewest number of barriers and no contract type specific barrier. In order to draw a clearer picture on which categories of barriers are more critical for which contract types, we calculated the percentage distribution of cumulative frequencies for each main category within each contract type. Results can be seen in Fig. 3 - please note that instead of the first main category (practical implementation of AECMs) we used its two sub-categories (institutional challenges and design of AECMs) for this calculation to allow a more even distribution of codes and frequencies. As Fig. 3 shows, there is a diverging pattern across the four contract types in terms of their major barriers. Based on these results, we can assume that the result-based approach suffers the most from barriers related to the design of the instrument (this category accounts for almost one quarter of all the codes mentioned for this contract type). This is followed by the lack of resources, the institutional challenges of implementation, and the context-specific impact of the agricultural system characteristics. Cultural factors and problems related to the information flow cannot be perceived as important barriers of result-based contracts in general, although this can also depend on the specific context.
Fig. 3: Percentage distribution of the (sub-)categories of barriers across the four contract types
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In the case of collective contracts, the variance across the different categories is smaller. Lack of resources stand in the front, followed by barriers related to the policy context and the institutional challenges of the implementation, and then the barriers related to the design of AECM. Cultural factors and the information flow seem to have a moderate impact, although we assume regional specificities might have a strong influence here (e.g. in regions/countries where there is a strong tradition of cooperation, cultural factors might not be such relevant, while in other places the lack of trust between farmers and public institutions can substantially limit the opportunities for collective contracts). The collective approach, however, does not look to be sensitive to the special characteristics of the agricultural system, perhaps because these specificities can be managed within the farmers’ groups as part of the collective contract itself.
The land tenure contract was reported as highly sensitive to the availability of financial, land and human resources - this category accounts for 27 % of all the codes recorded for the land tenure approach. The lack of both financial and land resources is more prominent in this contract type than in the others. The institutional challenges of implementation, and the limitations stemming from the policy and the cultural context are of medium importance, followed by information problems. Interestingly, the technical questions related to instrument design were mentioned proportionally the least frequently (together with agricultural system characteristics) among all the categories, suggesting that land tenure based contracts have a more or less well established design already (at least compared to result-based and collective ones). However, this result can also show that in land tenure contracts the actual requirements for biodiversity management are implemented through well-known and frequently used measures (e.g. action-based measures).
Value chain approaches are similar to the collective contracts in the sense that we cannot identify a main barrier category for this contract type. The proportionally most frequent, therefore most critical, barriers are the institutional challenges for implementation and the general policy context, followed by the lack of resources, cultural factors, and the special characteristics of the agricultural system. Looking at the relative percentage of the coding frequencies we can observe that both cultural factors and agricultural system characteristics have the highest weight in value chain approaches, compared to the other three contract types. This highlights how much context dependent value chain contracts are. Barriers related to instrument design and information flow are less characteristics for this contract type, perhaps because in many value chain contracts there is a more balanced representation of different value chain actors, and the design is often more tailor-made to their needs and the context specificities.
Summing up the results of the analysis with a focus on barriers we can state that there are six general barriers which appear more or less equally frequently in the four contracts: the specific national/regional characteristics of the agricultural system, the availability of human resources, the unpredictability at the policy level, and three more barriers related to the practical implementation of AECMs (considering climate change and natural hazards, spatial heterogeneity and complexity, and balancing between the land sparing and land sharing approach). By addressing these barriers, a more supportive and less bureaucratic policy environment could be created for all the four contract types. However, looking at the percentage distribution of coding categories within the contract types we could highlight specific barriers which need to be managed in order to implement different contracts successfully: instrument design is a crucial barrier for result-based contracts, the availability of resources is paramount for land tenure contracts, while the success of collective and value chain approaches depends more on the interplay of a few major barrier types: resources, institutional
©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 24 / 39 D 15 / 4.2 challenges and the policy context. In the next section we identify the major opportunities which can help overcome these barriers.
3.4. Existing opportunities in the current policy landscape During the first PIL workshops participants were asked also to collect and characterize the opportunities to overcome the barriers of the implementation of the agri-environmental measures. The barriers and the opportunities to overcome certain barriers are closely linked, but also the opportunities are linked to each other. In the following we briefly present the codes and categories of the opportunities, and then the links among the codes. We found seven main codes: coordination, communication, farmers and farming methods, control and measurement, finances, cooperation and local resources, and defined 22 subcategories within these codes.
Under coordination we defined three subcategories: spatial coordination, policy coherence and policy commitment. Spatial coordination refers to the need that in most of the cases the desired outcome can be reached only by coordinating management activities at a certain spatial level. Policy coherence would be necessary to implement policies which strengthen each other in the long and medium term. As it was mentioned in several PIL meetings, rural development, agricultural, or environmental and climate policies are sometimes contradictory. Policy commitment refers to farmers' claim to a long- term vision of decision-makers on natural and agronomic management, which is independent from the changes of politicians. The Dutch PIL offered a solution to advocating for extensive and nature- inclusive agriculture by rewarding the quality of habitat instead of rewarding the farmer for the target species while keeping farmers’ entrepreneurial objectives.
Communication and information flow has four subcategories: communication among decision- makers and local actors, communication toward the wider public, defining and presenting clear goals and finally training and advising farmers. The four subcategories are interlinked. A frequent problem of the farmers and local actors is that although they are aware of the agri-environmental measures, sometimes even familiar with them and open to implementation, they do not fully know the rationale behind them. Training would help them to comply with the rules. As it was discussed in the Dutch PIL meeting: coaching and knowledge sharing with farmers as well as the appreciation of different perspectives could contribute to understanding the goals and objectives of the agri-environmental measures. It is also linked to the issue of administrative controls and checks. As the German PIL workshop’s participants emphasized, according to the experience of the authorities, mistakes are rare and mainly unintended. Training and consultation for both, administration bodies and practitioners/ farmers/ advisors could help to overcome such problems. At several PILs it became also obvious that it is necessary to make the advantages of biodiversity conservation clear to both, farmers and the everyday people. In certain cases the wider public should be made aware of the goals of nature conservation and the benefits of agri-environmental measures (HU), which could also have an effect on the success of value-chain initiatives related to nature conservation or biodiversity preservation.
The code farmers and farming methods also has four subcategories: management of land, nature and biodiversity, engagement of farmers in farming, the concept of the good farmer2, and empowerment. This latter one is linked to the challenge of goal setting discussed above. Also the German, the Hungarian and the Dutch PIL argue that decision-makers, representatives from different local interest
2 Understood as farmers following good agricultural practice (see in more detail: FAO, URL19).
©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 25 / 39 D 15 / 4.2 groups (e.g. environmental protection, hunting, beekeeping, water protection etc.) and practitioners/farmers should decide about the goals together on a common ground, which would lead not only to better understanding of the measures but also to the empowerment of farmers. Thus, the farmers would have the necessary information to autonomously decide about engaging in a certain agri-environmental measure. During this process also controlling and measurement methods could be defined commonly to further strengthen farmers (BE). A training and consultancy system could help to change the image of the good farmer, to abandon the conventional view of farming and the farmer as a counterpoint of nature. As one of the arguments raised in the Dutch PIL states: instead of investing money in tight control and administration, investing in training is better and more efficient.
Control and measurement (monitoring and checking objective’s achievement) of the indicators was the most frequently discussed topic at the PIL workshops; it was raised in all of them except for the Italian case. It has four subcategories: simplification, flexibility, control and risk sharing.
The bureaucracy in relation to control could be simplified various ways: by collectivizing the contract model and promoting one single application the whole process became easier (BE, DE, ES). By keeping the measures relatively simple and practicable, the verification process remains simpler (UK). Also, technological improvements could be useful to simplify the system: geo-tagged photo documentation of the results, digitalization and automation of earmarked monitoring systems or using geo-referenced data and further workable new technologies.
Flexibility and tolerance represent a general desire according to the first PIL meetings. There are more arguments for it: (1) European and national legislation should be adapted to nature’s realities, (2) tailor-made measures could be more useful while keeping them flexible, (3) modular design of the measures could make it possible to adjust payments to results (both at parcel and spatial level). According to the Madrid PIL, also the access criteria could be more flexible.
Controls and checks are an important issue but could be turned to an opportunity if it was completely changed. Control could be defined based on the measurement and on commonly agreed and accepted indicators, and as we discussed control and training should be balanced. Greater tolerance would be beneficial before cutting of payments and sanctioning was enforced, as mistakes are oftentimes unintended. Also, in other cases PIL members mentioned ideas which should be demonstrated in the future. For example, the Flanders PIL reported that the way the controlling process is done can determine the success of a measure. The members of the PIL assume that if the control stimulates learning and improving of the agricultural method instead of correcting and sanctioning the farmers will be more eager to continue. Tools for self-measurement could be developed, and even linked to climate mitigation and carbon accounting (Danish PIL).
Wordings such as subsidies, compensations, supports, financial aids were merged under the code: finances. It has two subcategories: involving investment from commercial partners, and the challenges related to support and subsidies. In general farmers wish to ensure compensation for value loss and expenses incurred as well as additional incentives, but there are always uncertainties around subsidies and compensations. Therefore, modular solutions and adjustable payments could provide flexible and diverse solutions that better reflect the commitments of farmers. Some of the PILs offered alternatives. An idea was to change compensation to reward (English PIL): according to it certain habitats/lands could compete. In the French PIL participants discussed the role of individual payments. In some PILs also the involvement of commercial partners (English PIL), or other actors benefitting from biodiversity and ecosystem services (like the tourism sector) could contribute to farmers expenses.
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The code collective action and cooperation is also frequently discussed as an opportunity to overcome barriers and coordination challenges. By cooperation of farmers spatial coordination of nature conservation or habitat protection could be handled. German, Dutch and French PILs would offer additional and income effective payments for collaborative efforts. Also, control procedures could be made more efficient target-oriented using a collective approach.
The code local resources has three main subcategories: biodiversity, local actors and land (long-term tenancy). For the first view the subcategories seem to be far from each other, but all of them are linked to a certain locality. Biodiversity itself can be a useful resource to strengthen farming: local varieties can serve as a building block of a value chain or a local label. Local varieties can be more suitable for local circumstances as well. The Italian PIL discussed this topic in detail, as there are several existing measures aiming at preserving local varieties. The existence of key persons and local actors (i.e. people having a strong vision and entrepreneurial approach) were discussed as opportunities of the discussed processes in the Hungarian and Spanish PILs. Land is a scarce asset in almost all of the countries participating in the research, thus land tenure, especially long term land tenure, would be a real opportunity (UK, H, IT NL). In the different PILs different solutions were discussed to overcome the problem.
As Table 6 shows (see Annex 2), there are no opportunities which were discussed in all of the countries; it means that there are no general, ready-made solutions to overcome the different barriers. Focusing on the codes, it is clear that PILs identified coordination and communication as the main opportunities to solve problems related to agri-environmental measures. It is also clear that certain opportunities and topics were more important than others: control, simplification, training and advising, land lease (long term) were discussed in more than half of the PILs.
Control, as presented above, is a complex topic and is a core problem; it should be profoundly changed to turn it into an opportunity. It is usually discussed together with other opportunities. The subcategory ‘training and advising’ is a complex one, representing several different statements. Although it was discussed only in 5 PILs, when it was present in the discussion it was mentioned frequently, which means it was considered an important opportunity by the participants of the PILs. The role of financial support and subsidies were discussed with similar frequency, but in fewer PILs.
Land and land tenure is an important issue, in terms of land scarcity but also land abandonment. To address this problem there are initiatives to link long term land tenure and nature management. In these cases landowners reward tenants for good agricultural practice by asking for lower rents, and they benefit from better environmental outcomes. In the Italian PIL the role of land cooperatives was discussed in offering small plots for farmers, thus farmers and landowners could lower administration costs, but also nature management could be better conducted at a larger scale. The case of land as a local resource is interesting. It was mentioned in five PILs, but it was discussed in depth only in the Italian PIL. It may mean that in the other cases the problem is too difficult or really obvious problem, so it is not worth spending too much time on it.
The role of biodiversity was also discussed, and it appears in the analysis as a horizontal issue in the communication, in the subcategory on nature-management, and explicitly as a subcategory of local resources. The role of biodiversity in communication is clear: farmers and the wider public are usually not aware of the importance of genetic variability and biodiversity, but if this lack of knowledge can be changed through better communication and knowledge transfer. Participants argued that nature management, as a part of agricultural technologies, could also lead to the conservation of biodiversity. It is also evident that biodiversity can be an important local resource as it was discussed in the Italian
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PIL. Despite all these, it is less evident that the participants of the PILs in most cases did not find biodiversity an opportunity, only, in an ideal case, a desired outcome of the common efforts of ecologists, decision-makers and farmers.
It is also widely acknowledged that cooperation among farmers would benefit nature management, result in lower administrative costs, and could also be rewarded in targeted payments. Cooperation and training could increase the efficiency of control and the measurement of the results as we showed above.
4. HOW TO MAXIMIZE AGRI-ENVIRONMENTAL PUBLIC GOODS IN THE CURRENT POLICY FRAMEWORK?
4.1. Summary of results Several agri-environmental-climate measures are implemented in EU countries which combine elements of different novel contractual models as well as conventional contracts. Novel contracts are already applied in most of the studied regions, and while they are considered promising, many questions remain about their technical / institutional setup and implementation. We could not identify a general pattern across the PILs in terms of which novel contracts are used more frequently in which part of Europe. In the studied regions and countries action-based measures are still among the most important instruments to incentivize the production of agri-environmental-climate public goods, and novel contract types are often used as a component of, or in combination with, these more conventional measures. The four novel contract types are known almost equally frequently in the studied regions and countries, although how profound experiences a region/country has with these contracts varies (depending on for how many years the contracts are in use, and in how many different forms they are implemented). The collective contract proved to have the most diverse institutional set-ups, while fewer independent examples were mentioned for land tenure and result-based contracts as well as value chain approaches. The collective contract is the standard and promising design of contracts under AECMs in the Netherlands and it is also used in other places. Land tenure contracts are known in most studied countries, although they do not necessarily include direct incentives for conservation management and their effectiveness was assessed as highly variable. Result-based contracts were reported by 6 out of the 9 PILs as to be currently used in their respective region/country, mainly in combination with conventional measures or as a pilot. While in general it was considered very promising, several technical questions arose concerning its application at wider scales. Value chain approaches were mentioned in 6 PILs and most frequently scored to have low effectiveness, although we assume this is partly the consequence of the composition of PILs. A large number of different barriers exist in Europe which hinder the effective implementation of both novel contracts and more mainstream measures. The interplay between these barriers creates a country- or region-specific environment for AECMs, which needs to be taken into account when new contracts are designed and implemented. The most widespread barriers across Europe are budget and investment related challenges, social norms and acceptance, and the technicalities of how to establish robust and cost-effective measurement (mentioned in at least 6 out of the 9 PILs). Beside these general obstacles, we could not
©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 28 / 39 D 15 / 4.2 find any regional pattern (i.e. some barriers are more typical in some regions/countries of Europe than in others) - we assume that institutional, social, cultural and environmental factors work in country specific combinations, and the interplay between them make their final impact on the different contract types highly heterogeneous. This is reinforced by the finding of our qualitative analysis that some barrier codes follow each other. For example, in countries where the barriers related to the general political context are more common, social norms and acceptance creates a bigger obstacle for the effective implementation of AECMs. Similarly, where there is a lack of human resources at the level of public administration and advisory services, lack of knowledge and information tends to have a more substantial impact on AECMs. While there are some barriers which seem to have an almost equally significant impact on all four contract types, there are others which are highly characteristic to one or two contract types. The collective approach is a challenging contract type as all the barriers were listed here and also the frequency of codes were the highest here. Result-based contracts and land tenure contracts were perceived as medium-challenging. Value chain approaches look to be the least challenging in terms of barriers listed, and no specific barriers were mentioned for this type. However, this could also happen because participants of PILs were not experts in market-based instruments but experienced rather in governmental / public incentives. There are six general barriers which appear more or less equally frequently in the four contracts: the specific national/regional characteristics of the agricultural system, the availability of human resources, the unpredictability at the policy level, and three more barriers related to the practical implementation of AECMs. However, looking at the percentage distribution of coding categories within the contract types we could highlight specific barriers for each of them: instrument design is a crucial barrier for result-based contracts, the availability of resources is paramount for land tenure contracts, while the success of collective and value chain approaches depends on the interplay of three major barrier types: resources, institutional challenges and the policy context. Taken into account which barriers are hindering which contract types the most, and comparing this with the country-specific list of barriers, a more concise recommendation can be made in terms of key issues that have to be in focus to support a successful implementation of the different types of contracts. Following the above presented results we recommend to tailor novel contractual solutions to the specific context of a given region or country, as follows: In order to successfully implement result-based contracts, sound expertise in instrument design has to be made available with special focus on clear objectives based on explicit facts, appropriate indicators for monitoring, substantial financial and human resources have to be provided including training and advisory services, and challenges stemming from the institutional aspects of implementation, as well as from the more general policy context should be alleviated. In order to successfully implement collective contracts, substantial financial, human and land resources have to be provided with incentive-based effects, contract governances have to be more transparent, integrative and flexible, institutional challenges of implementation have to be resolved, instrument design should continue to improve, and entrepreneurship and flexibilities for practitioners/land managers/farmers should be strengthened.
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In order to successfully implement land tenure contracts, substantial financial, human and land resources are needed, institutional challenges of implementation have to be managed, and barriers coming from the general policy and cultural context have to be lowered. In order to successfully implement value chain approaches, policy context related barriers need to resolve, and institutional challenges of implementation have to be managed. Besides providing substantial resources, it is also crucial to tailor the contracts to cultural factors and the specific characteristics of the agricultural sector. Coordination and communication are the main opportunities to solve problems related to agri- environmental measures. Control, simplification, and an increased role of farmers and farmers’ advisory services were also considered key topics to improve the implementation of different contract types. Although there are no ready-made solutions, there are several links between the opportunities identified, which shows the potential of creating synergies if several opportunities are combined. Although coordination seems to be necessary both at the policy and at spatial level it is not mentioned in all the PILs. The interlinked opportunities to overcome the barriers of agri-environmental measures could be realized only with stronger coordination, or with effective cooperation among stakeholders. As we saw in the case of land, land scarcity and land abandonment could be a problem, coordination and combination of different measures could lead to novel satisfying solutions. Also aims of nature conservation seems to be shadowed if coordination of the different policies is missing. Communication in a broad sense is linked also to other opportunities, as we presented, and it is necessary at several levels to support coordination and cooperation and as an alternative to control. 4.2. Study limitations and future research questions The first round of PIL workshops as well as our analysis have some limitations. In some countries, the PILs represented and discussed regional AECMs rather than national policies, due to the federal or devolved administrative structure (e.g. Flanders, England, North Rhine-Westphalia). As such, the results apply foremost to that region and only to some extent to the whole country. Since one of the aims of the PILs is to foster interaction and collaboration across decision makers and channel their views and professional expertise into the contract innovation process, the PIL workshops have not been (and will not be) designed solely to collect data, knowledge and experiences from participants, but to create an enabling environment for a reflective and collaborative process. Therefore, PIL coordinators could flexibly decide on the actual format and the list of invitees of the workshop, which resulted in heterogeneous and ‘uneven’ reports in terms of how detailed and comprehensive the information was that they provided for different sections of the reporting template. This heterogeneity might have caused some aspects of the analysis to be more shallow or not comparable across countries/regions. For instance, we did not fully succeed to conduct PIL workshops in which all agri- environmental measures were considered, consequentially, the collection and discussion of barriers remained biased. Additionally, we aimed at linking opportunities to the different PILs, as well as analysing the cross-linkages between barriers and opportunities, but we could not find relationships that are reliable and robust enough to avoid speculation. Also, we realized that the value chain contract type was discussed in more detail and received an overall more pessimistic evaluation, but at the same time had few barriers, too. One potential reason for this is a subjective distortion: PILs primarily invited policy decision makers and public administrators, who might have been more familiar with public
©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 30 / 39 D 15 / 4.2 measures than market-based instruments. Despite these limitations, we found some general patterns of barriers across the contract types and could highlight that certain opportunities seem to enforce each other, as we showed in our analysis above. The first PIL workshops were instrumental in the sense that they provided the opportunity to decision makers to get them on board and to let them express their expectations towards Contracts2.0. Although it was not directly asked if participants have any specific research or practical questions to be answered by the project, some issues were highlighted among the barriers and opportunities which can be the target of future research. These focused mainly on the different aspect of instrument design: How to ensure that the measurement of the outcomes is reliable, robust, but at the same time cost-effective and easily communicable to farmers and understandable also for laymen? How to design the payments effective as incentives (incl. both the level and the distribution of the payment) in a way that provides an income effective incentive to farmers and at the same time a fair and target-oriented distribution of money? How to balance the different time horizons of the environmental impact, farmers’ willingness to participate, and the institutional norms by defining the duration of the contract?
These three questions are fully reflected in the aim of Contracts2.0 to developed contract-based approaches that should be environmentally more efficient, economically viable for farmers and support the longevity of contractual arrangements.
ACKNOWLEDGEMENT
We are grateful for all participants of the Contracts2.0 Policy Innovations Labs for their active inputs, and for the knowledge and information they shared with us during the workshops and personal communications. We are also thankful for other policy experts who might have not participated in the workshops but shared with us their insights during informal interviews and face-to-face meetings.
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ONLINE SOURCES
URL1: https://www.project-contracts20.eu/pils/
URL2: https://hffa-research.com/projects-publications/agriculture/farm-economics/the-cost-of-eu- environmental-standards-and-additional-regulations-in-german-agriculture/
URL3: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52017DC0152&from=EN
URL4: https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/key_policies/documents/cap- post-2020-environ-benefits-simplification_en.pdf
URL5: https://www.euractiv.com/section/agriculture-food/news/transitional-cap-puts-back-blocs- green-ambition-in-farming-warn-auditors/
URL6: https://www.euractiv.com/section/agriculture-food/news/council-ready-to-start-negotiations- on-bridging-cap-divide/
URL7: https://www.euractiv.com/section/agriculture-food/news/transitional-cap-puts-back-blocs- green-ambition-in-farming-warn-auditors/
URL8: https://www.euractiv.com/section/agriculture-food/news/transitional-cap-puts-back-blocs- green-ambition-in-farming-warn-auditors/
URL9: https://ec.europa.eu/environment/nature/rbaps/index_en.htm
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URL12: https://www.rheinische-kulturlandschaft.de/
URL13: https://www.kulturlandschaft.nrw/
URL14: https://www.boerennatuur.nl/collectieven/
URL15: https://www.rheinische-kulturlandschaft.de/
URL16: https://www.kulturlandschaft.nrw/
URL17: http://www.europarl.europa.eu/supporting-analyses
URL18: https://ec.europa.eu/info/food-farming-fisheries/key-policies/common-agricultural- policy/future-cap_en#proposal
URL19: http://www.fao.org/3/Y8704e/Y8704e.htm
Last access at all websites was on the 27th of April, 2020.
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ANNEX 1 CODES EMERGING FROM THE QUALITATIVE CONTENT ANALYSIS
Table 4: Coding summary for barriers
Category / Sub-category Code Brief explanation
Implementation of Institutional misfit Harmful subsidies and perverse outcomes exist. Policies AECMs and measures are not adapted to small scale actors or → Sub-category: specific landscape characteristics. Novel contracts do not Institutional challenges fit into the existing legal and political system (e.g. shared responsibility in case of collective contracts). High opportunity costs due to misfit.
Bureaucracy and the The application process is highly bureaucratic, wording is rigidity of timing and complicated, therefore specialized knowledge is needed requirements on behalf of land managers. Managing natural processes requires flexibility which is not given in the current system, very high expectations towards farmers (small error margins, short deadlines, frequent controls, severe sanctions) - perceived as Damocles' sword.
Spatial diversity and Different frame conditions exist in each country - complexity generalization of measures is not always possible
Land sparing vs. land A balance between land sparing and land sharing sharing approaches is important. Creating natural elements (e.g. hedgerow) can lead to loss of land.
Implementation of Payment vehicle Level of payment is sometimes not high enough to AECMs incentivize farmers, fails to acknowledge coordination and → Sub-category: AECM administrative costs and does not reflect a fair distribution design of funds. How to create layered payments, and achieve that payments are not perceived as state aid.
Robust and cost- Impacts are difficult to measure and monitor, the farmer effective is not always in control, documentation is overly robust measurement and complex, monitoring focuses only on ecological impacts but does not consider indirect impacts especially on the economic and social system.
Duration Balancing the duration of contracts in order to build trust but avoid system rigidity. There is often a mismatch between contract duration and the time horizon of measurable environmental outcomes.
Consider climate Climate measures are not yet fully integrated in AECMs, change and natural arguments on carbon emissions often used in hazards contradictory ways. Risks of natural hazards and climate change are not acknowledged.
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Resources (financial, land Budget and The overall budget for CAP AECMs is decreasing, national and human) investments and regional funds are in many places uncertain. There is a lack of financial support for specific target areas (e.g. small scale investments, maintenance, breeding).
Land property rights Limited availability of agricultural land, profit oriented and tenure tenure system, landowner motivations might be different than those of the land manager (landlord might not be aware of / interested in conservation)
Work overload of Land managers / farmers are overloaded with paperwork, farmers huge responsibility is on a few persons' shoulders, farmers need to set aside time and resources for frequent controls.
Human resources in Lack of technical staff who can provide guidance to public administration farmers in terms of administration or conservation / advisory actions. Also management capacities or local change. makers are missing which hinder the wide scale uptake of measures.
Policy context Policy inertia / lack of Short term policy vision, policy reluctance to change, vision moving to a new paradigm requires significant intellectual, financial and practical investment.
Diversity of While on one hand increasing the diversity of measures instruments would be welcome (to create measures more suitable to a given landscape), huge diversity creates competition and policy incoherence.
Multiscale and Many measures spread over several governmental multisectoral agencies, interaction across scales and policy sectors is not governance straightforward, policy decisions do not consider conflicting goals and resource gaps in the value chain.
Uncertainty Unpredictability at the policy level discourages farmers to participate, farmers fear sudden policy changes.
Goal setting Objectives are often conflicting (nature conservation vs. high productivity), the common goal is often missing in contract types where several stakeholders are collaborating.
Cultural factors Trust and Lack of trust between farmers and between farmers and collaboration administration, in some contexts lack of collaborative culture. Strong partnership is required to cut through the complex interactions of existing positions.
Social norms and The shared social perception of the good farmer is not acceptance compatible with some of the conservation efforts, social reluctance to accept that production should be reduced, community perception of some farming practices is not supportive, free-riding exists in some communities as a social norm.
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Information flow Communication and AECMs are not well articulated to target groups, limited engagement flow of information up- and downstream and limited communication across farmers and contractors leads to farmers feeling not to be engaged.
Knowledge and Lack of knowledge on the (possible) impacts of measures, information lack of ecological knowledge, lack of detailed information on how certain measures are set up and work in practice.
Agricultural system Agricultural system There are several country or region specific characteristics characteristics characteristics of the agricultural system (e.g. land abandonment vs. intensification, ageing of farmers, weed pressure, competition over land by agriculture and other investments etc) which limit the applicability of general measures and schemes.
ANNEX 2 CROSS-COUNTRY COMPARISON BASED ON CODING FREQUENCIES
Table 5: Comparison of barriers across PILs
Barriers Regions/Countries represented by PILs No. of PILs BE DK FR DE HU IT NL ES UK Freq. mentioning
Implementation of AECMs (institutional challenges and design) 51 8
Institutional misfit 3 0 1 1 0 0 0 0 0 5 3
Land sparing vs. land sharing 1 0 0 0 0 0 0 0 0 1 1
Bureaucracy, rigid timing and requirements 2 0 0 4 1 0 1 8 0 16 4
Spatial diversity and complexity 0 1 0 1 1 0 0 0 0 3 3
Duration 0 0 0 0 0 0 0 0 1 1 1
Payment vehicle 6 2 1 0 0 0 3 0 0 12 5
Robust and cost-effective measurement 3 0 1 1 1 0 1 0 2 9 6 Consider climate change and natural hazards 0 2 1 0 0 0 0 0 1 4 4
Resources (financial, land and human resources) 33 8
Budget, investments 5 0 0 1 1 2 1 6 1 17 7
Land property rights and tenure 0 0 0 0 0 1 2 0 1 4 3
Work overload 0 0 1 1 0 0 0 0 0 2 2 Availability of human resources in public administration / advisory 3 0 0 0 1 0 0 7 0 11 3
Policy context 25 6
Policy inertia / lack of vision 1 0 0 0 1 0 2 2 2 8 5
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Unpredictability at the policy level 2 0 0 0 1 0 0 0 0 3 1
Multiscale and multisectoral governance 2 0 0 0 0 0 1 1 1 5 4
Diversity of policy measures / tools 1 0 1 0 0 0 0 0 0 2 2
Goal setting 0 0 0 0 1 0 1 0 1 3 3
Cultural factors 20 7
Social norms and acceptance 4 0 1 0 4 0 1 4 1 15 6
Trust and collaboration 0 0 0 0 2 1 0 1 1 5 4
Information flow 18 7
Communication and engagement 3 0 3 0 1 0 0 1 1 9 5
Knowledge and information 3 1 0 0 1 0 1 3 0 9 5
Agricultural system characteristics 9 5
Agricultural system characteristics 2 1 1 0 0 0 4 1 0 9 5
Table 6: Comparison of opportunities across PILs
No. of PILs Short name of the opportunity: BE DK FR DE HU IT NL ES UK Freq. mentioning Coordination 6 1 2 2 1 1 1 1 16 8
Spatial 2 1 1 1 1 6 5
Policy coherence 4 1 1 1 1 8 5
Policy commitment 1 1 2 2
Communication 1 1 4 1 5 2 3 4 1 22 9
among policy & actors 1 1 1 3 3
toward wider public 1 1 2 1 5 4
clear goals 1 1 1 1 4 4
Training Advising 1 2 2 3 2 10 5 Farmer & farming methods 2 2 1 1 2 1 3 12 7
Empowerment 2 1 1 4 3 Management of land/nature/biodiversity 1 1 2 2
Engagement of farmers in farming 1 2 3 2
Good farmer3 1 1 1 3 3
Control & measurement 6 2 4 2 2 6 2 24 7
3 Meant as farmers following good agricultural practice.
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Risk sharing 1 1 1
Simplification 3 1 1 4 1 10 5
Flexibility 1 2 1 1 5 4
Control 2 1 1 1 2 1 8 6
Finances (subsidies & supports) 3 1 4 3 1 12 5
Involve commercial partners 1 1 2 2
Support 3 1 4 2 10 4
Collective action & cooperation 1 1 4 6 3
Local resources 1 1 2 2 1 2 1 10 7
Biodiversity 1 1 2 2
Actors 1 1 1 3 3
Land (Long Term tenancy) 1 1 1 1 1 5 5
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