Final Report Summary - ITAES (Integrated Tools to design and implement Agro Environmental Schemes)
Agriculture, apart from producing marketable goods, is responsible for various rural amenities, such as landscape development and support of wildlife and biodiversity. Agricultural activities used to be in balance with the surrounding environment, did not use artificial substances, relied on recycling of organic matter and processed waste as manure. However, this balance was gradually reversed, due to the introduction of fertilisers, the increased mechanisation of the production, the intensification of land exploitation and the augmentation of farms' size. As a result, contemporary production has significant impacts on the quality of landscape, soil, water, air and nature.
The increased social demand for rehabilitation of the natural environment and protection of wildlife imposed institutional regulations over agricultural activities, so as to restore balance between utilisation and protection of the environment. Such regulations are the agri-environmental schemes (AESs) that are applied in the European Union (EU) Member States. The ITAES project aimed to develop a framework to analyse the characteristics, design and implementation of AESs as well as to evaluate alternative AESs within this framework. Recommendations for the increased viability of the schemes were also formulated and disseminated during the project.
It was firstly necessary to focus on the development of operational objectives and on the testing of measures in terms of their efficiency, effects, income distribution and legitimacy. Therefore, government intervention towards the promotion of sustainable agriculture could be evaluated.
The analysis was performed under the assumption that authorities of various levels had developed distinct policy targets. Numerous instruments were employed to preserve environmental quality, such as research and education, direct regulations, fiscal facilities, subsidies and levies and government provisions. A matrix containing information on behaviour, transaction, persuasion and the role of government was utilised for the abovementioned options' assessment.
It was also examined whether AESs constituted contracts between the authorities and the private sector. ITAES defined them as incomplete contracts due to lack of information, bounded rationality and important costs to obtain information and monitor implementation. In addition, AESs were classified as neoclassical contracts and more particular characteristics were specified. A framework was subsequently developed to determine criteria for policy analyses and to facilitate the identification of design principles for viable schemes.
The principles were based on literature review and aimed to reduce the effects of hidden actions, hidden information, shirking and lack of credible commitment and trust which were observed due to contracts' incompletion. The techniques to reduce hidden information were signalling, screening and self-selection conditions. Hidden actions or shirking could be limited by monitoring, incentive contracts, bonding, common norms and values between the involved parties and, finally, in-house production. Mutual commitment was also based on monitoring, as well as on penalties for violating rules and mechanisms to resolve emerging disputes. Enhancing the reputation and credibility of the authorities and, secondarily, of the farmers was identified as a necessity. Finally, the elaborated policy analysis was based on four principal criteria, namely the uptake of AESs, the environmental effectiveness, the transaction costs' efficiency and the impacts on farmers' income.
The establishment of the analysis framework required a thorough review of the implementation of AESs in different time periods. The framework consisted of three toolboxes and was utilised to investigate numerous AESs components, such as participation, coordination, flexibility, effectiveness and potential to exploit the identified design principles to minimise contractual failures. Ten case studies were evaluated as part of ITAES, representing different locations and areal coverage. The main environmental pressures were water pollution, loss of biodiversity and soil erosion.
The targets of the analysis were based on the hierarchical set of European environmental objectives. The selected evaluation criteria were applied in combination with score indicators. In addition, stakeholders' interviews were conducted to clarify institutional aspects. The design of AESs was reviewed based on the observed farmer preferences, so as to increase their implementation efficiency. Multi-criteria analysis (MCA) was also utilised as a tool to improve the design and assess the application of AESs based on schemes' comparisons. As a result, a series of recommendations towards the policy makers was produced.
The increased social demand for rehabilitation of the natural environment and protection of wildlife imposed institutional regulations over agricultural activities, so as to restore balance between utilisation and protection of the environment. Such regulations are the agri-environmental schemes (AESs) that are applied in the European Union (EU) Member States. The ITAES project aimed to develop a framework to analyse the characteristics, design and implementation of AESs as well as to evaluate alternative AESs within this framework. Recommendations for the increased viability of the schemes were also formulated and disseminated during the project.
It was firstly necessary to focus on the development of operational objectives and on the testing of measures in terms of their efficiency, effects, income distribution and legitimacy. Therefore, government intervention towards the promotion of sustainable agriculture could be evaluated.
The analysis was performed under the assumption that authorities of various levels had developed distinct policy targets. Numerous instruments were employed to preserve environmental quality, such as research and education, direct regulations, fiscal facilities, subsidies and levies and government provisions. A matrix containing information on behaviour, transaction, persuasion and the role of government was utilised for the abovementioned options' assessment.
It was also examined whether AESs constituted contracts between the authorities and the private sector. ITAES defined them as incomplete contracts due to lack of information, bounded rationality and important costs to obtain information and monitor implementation. In addition, AESs were classified as neoclassical contracts and more particular characteristics were specified. A framework was subsequently developed to determine criteria for policy analyses and to facilitate the identification of design principles for viable schemes.
The principles were based on literature review and aimed to reduce the effects of hidden actions, hidden information, shirking and lack of credible commitment and trust which were observed due to contracts' incompletion. The techniques to reduce hidden information were signalling, screening and self-selection conditions. Hidden actions or shirking could be limited by monitoring, incentive contracts, bonding, common norms and values between the involved parties and, finally, in-house production. Mutual commitment was also based on monitoring, as well as on penalties for violating rules and mechanisms to resolve emerging disputes. Enhancing the reputation and credibility of the authorities and, secondarily, of the farmers was identified as a necessity. Finally, the elaborated policy analysis was based on four principal criteria, namely the uptake of AESs, the environmental effectiveness, the transaction costs' efficiency and the impacts on farmers' income.
The establishment of the analysis framework required a thorough review of the implementation of AESs in different time periods. The framework consisted of three toolboxes and was utilised to investigate numerous AESs components, such as participation, coordination, flexibility, effectiveness and potential to exploit the identified design principles to minimise contractual failures. Ten case studies were evaluated as part of ITAES, representing different locations and areal coverage. The main environmental pressures were water pollution, loss of biodiversity and soil erosion.
The targets of the analysis were based on the hierarchical set of European environmental objectives. The selected evaluation criteria were applied in combination with score indicators. In addition, stakeholders' interviews were conducted to clarify institutional aspects. The design of AESs was reviewed based on the observed farmer preferences, so as to increase their implementation efficiency. Multi-criteria analysis (MCA) was also utilised as a tool to improve the design and assess the application of AESs based on schemes' comparisons. As a result, a series of recommendations towards the policy makers was produced.
