COMPARATIVE ANALYSIS OF THE ADVANTAGES AND LIMITATIONS OF ACTION-BASED AND PERFORMANCE-BASED AGRI-ENVIRONMENT SCHEMES

Abstract

The majority of agri-environment payments (AEPs) in the European Union (EU) are action-based payment schemes that impose specific agricultural management requirements on farmers. These schemes offer clear and specific instructions for farmers, making them easier to understand and implement. They also provide stable and predictable income which helps farmers with handling the financial risks. However, they do not always deliver the desired environmental outcomes and their effectiveness in protecting biodiversity is limited. This paper outlines some of the limitations of the action-based ecological schemes including their lack of fle ibility when it comes to addressing the specific needs and conditions of the farmland and their economic inefficiency as in some cases re-sources are being spend on actions that do not always lead to significant environmental benefits. To increase their effectiveness, it may be useful to integrate result-based schemes that link payments to specific ecological results. Result-based ecological schemes give freedom to farmers to adapt their farming practices to the specific conditions of their land. They provide financial incentives for farm-ers to achieve measurable environmental benefits such as improved biodiversity, water quality, soil health and other ecosystem services. E isting result-based payments are mainly aimed at maintain-ing threatened habitats or priority species for conservation. This type of payments give freedom to farmers to adapt their farming practices to the specific conditions of their land. In general, result-based agri-environmental schemes are successful when the cause-effect relationships between farm-ing practices and environmental objectives are well established and can be represented by single or combined indicators. Despite the distinct advantages, results-based schemes face certain challenges – not all biodiversity targets can be measured by indicators; isolation and fragmentation of species and habitats; increased economic risk for farmers; need for appropriate advisory support. To overcome the specific limitations of the two types of environmental schemes, it would be useful to consider a hybrid approach that combines payments for actions and payments for results. The current report provides e amples for the implementation of result-based schemes in Germany, Switzerland and Ireland. These countries were selected as they have one of the longest running and best designed result-based payment schemes in Europe. They can be used as a basis for the further development and application of result-based schemes. The aim of this report is to discuss the advantages and limitations of action-based and result-based agri-environment schemes. A comparative analysis of the two types of agri-environmental schemes was carried out based on the existing scientific literature.