Innovative contracts are needed that promote the provision of biodiversity and diverse ecosystem services from land under agricultural production, given that mainstream agri-environment-climate measures (AECM) funded by the public purse have shown limited effectiveness. Recently, various actors from the public, private and third sectors have experimented with and implemented innovative contracts that incentivise farmers for the increased provision of environmental public goods alongside private goods. Due to their evolving and experimental nature, detailed information on characteristics of contract design and governance context of these contracts is lacking, hence preventing them from being used more widely. This paper addresses this gap and reports the findings of an analysis of 62 cases, based on information from a literature review and complemented by expert knowledge. Following an actor-based typology, we identified innovative payments for ecosystem services (PES) as the most common contract type, followed by value chain approaches and very few land tenure contracts. Alternative classifications are possible, with hybrid contracts showing promising combinations of different contract characteristics such as basis of payment (action-based, results-based) and contract parties (collective or bilateral arrangements). The most innovative approaches were value chain contracts. They exhibited more tailored contracts between (single) producers and processors instead of the generic publicly-funded AECM, a stronger bottom-up approach to define the (mostly action-based) measures, and the interest of processors to use these activities for marketing purposes. In contrast, publicly-funded PES contracts appeared to be more innovative with respect to results-based payments rewarding the environmental performance of farmers, and providing them more flexibility and autonomy. Future research should focus on the benefits of such innovative contracts, e.g. with regard to costs and environmental effectiveness.
Bibliographical noteFunding Information:
This publication is part of a project that has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement No 818190. The authors thank the reviewers for their valuable comments and suggestions, which considerably improved an earlier version of the manuscript. We also appreciate the support of Bettina Matzdorf, C?line Dutilly, Edward Ott, Jennifer Dodsworth, Katarzyna Zagorska, Lisa Deijl, Rena Barghusen, Salomon Espinosa Diaz and Sven Defrijn from the Contracts2.0 team.
- Contract governance
- Public goods
- Value chain approaches
- Land tenure approaches
- AGRI-ENVIRONMENT SCHEMES