Does transaction costs expense create transaction gains for farmers participating in an agri-environmental scheme?

Anja Weber

Journal of Environmental Economics and Policy, 2014, vol. 3, issue 2, 215-236

Abstract: Participating in agri-environmental schemes (AES) induces transaction costs for farmers, originating from time and money spent on tasks related to participation. High transaction costs may inhibit scheme participation, which would endanger the environmental goals aspired. To date, farmers' transaction costs have been investigated from a cost-minimising perspective, implying fixed gains from participation. Nonetheless, participation contracts may contain negotiable parts. In such a case, especially, cost-constituting tasks undertaken by farmers' own attempts could serve gain-maximising: Farmers can utilise additional information to increase their transactional gain, namely the payment. This paper addresses this question by investigating transaction costs of farmers participating in a site-specific grassland extensification scheme in Hesse, Germany, which contains negotiable features. Upon insights from information economics and transaction cost economics, the study discusses possible gains and tests the impact of farm and scheme-related features on both absolute and relative transaction costs, the latter conceptualised as payment/total transaction costs ratio. Results reveal that a higher transaction costs expense goes in line with a lower payment/transaction costs ratio; however, higher transaction costs expense predominates for particular farms features indicating dependency on AES income. Thus, voluntary transaction cost expenses seem to serve as a safeguard for securing participation-related income.

Date: 2014
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/21606544.2014.886530 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:teepxx:v:3:y:2014:i:2:p:215-236

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/teep20

DOI: 10.1080/21606544.2014.886530

Access Statistics for this article

Journal of Environmental Economics and Policy is currently edited by Ken Willis

More articles in Journal of Environmental Economics and Policy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().