EconPapers    
Economics at your fingertips  
 

Do farmers prefer increasing, decreasing, or stable payments in Agri-Environmental Schemes?

Douadia Bougherara, Margaux Lapierre (), Raphaële Préget () and Alexandre Sauquet
Additional contact information
Margaux Lapierre: CEE-M - Centre d'Economie de l'Environnement - Montpellier - UMR 5211 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Raphaële Préget: CEE-M - Centre d'Economie de l'Environnement - Montpellier - UMR 5211 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

Post-Print from HAL

Abstract: Nearly all Agri-Environmental Schemes (AES) offer stable annual payments over theduration of the contract. Yet AES are often intended to be a transition tool, designed totrigger changes in farming practices rather than to support them indefinitely. A decreasingsequence of payments thus appears particularly attractive as a reward structure for AES.The standard discounted utility model supports this notion by predicting that individualsshould prefer a decreasing sequence of payments if the total sum of outcomes is con-stant. Nevertheless, the literature shows that numerous mechanisms, such as increasingproductivity, anticipatory pleasure, and loss aversion, can, by contrast, incline individualsto favor an increasing sequence of payments. To understand the preferences of farmersfor different payment sequences, we propose a review of the mechanisms highlighted bythe literature in psychology and economics. We then test farmers' preferences for stable,increasing or decreasing payments through a choice experiment (CE) survey. In this sur-vey, farmers are offered hypothetical contracts rewarding the planting of cover crops. Toreduce hypothetical bias, the choice cards were designed following repeated interactionswith local stakeholders. One hundred twenty-three French farmers, about 15% of thosecontacted, responded to the survey. Overall, farmers do not present a clear willingnessto depart from the usual stable payments. Nevertheless, 17% declare a preference for in-creasing sequences of payment. Moreover, we find a significant rejection of decreasingpayments by farmers with a lower discount rate or farmers more willing to take risks thanthe median farmer, contradicting the discounted utility model

Keywords: Discounted utility; Cover crops; Farming practices; Agri-Environmental Schemes; Choice experiment; Sequences of outcomes (search for similar items in EconPapers)
Date: 2020-09-10
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03028323
References: Add references at CitEc
Citations: Track citations by RSS feed

Published in 7th FAERE Annual Conference, Sep 2020, Grenoble, France

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Do farmers prefer increasing, decreasing, or stable payments in Agri-environmental schemes? (2021) Downloads
Working Paper: Do farmers prefer increasing, decreasing, or stable payments in Agri-Environmental Schemes? (2021) Downloads
Working Paper: Do farmers prefer increasing, decreasing, or stable payments in Agri-Environmental Schemes? (2021) Downloads
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:hal:journl:hal-03028323

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2021-12-29
Handle: RePEc:hal:journl:hal-03028323