To prevent further biodiversity loss as a result of intensive agricultural practices, Agri-Environmental Schemes (AES) have been implemented on European farmland. Unfortunately these AES have not always been effective in terms of biodiversity and farmer participation.
In an effort to improve the AES system, the Dutch government switched from an individual application system to a collective application system for AES payments in 2016. The goal of this paper is to analyse the effects of introducing this collective application system in terms of farmer participation and biodiversity. We construct a multi-objective mathematical programming model in which farmers maximise utility. Farmers are linked through their common effect on biodiversity.
In the collective application system payments are only available when the biodiversity in the region is above a certain threshold. Simulation results show no difference in farmer participation and biodiversity between the individual application system and the collective application system. Farmers in our sample attach high weights to biodiversity, therefore the biodiversity level is above the threshold and AES payments are available in both application systems. In a model experiment where farmers attach smaller weights to biodiversity, farmer participation and biodiversity are much lower in the collective application system for AES.