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 D 15 / 4.2 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. ©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 2 / 39 D 15 / 4.2 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 ©Contracts2.0 – 28/04/2020 www.project-contracts20.eu 3 / 39 D 15 / 4.2 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