The main governance solution under study are agri-environmental schemes. Agri-environmental schemes (AES) are subsidies for farmers encouraging introduction of specific environment-friendly practices on their land. These practices improve provision of farming-related public goods. The supply of biodiversity typically results in the loss of financial rewards to farmers due to missing markets, non-rivalness and non-excludability of public goods’ benefits. On the other hand, protecting biodiversity typically comes at an opportunity cost to landowners (which is increasing with investments made). AES are the most commonly known approach to this economic problem. They are implemented by governments throughout the EU, co-financed between the European Commission (EC) and EU member States, and are based on 5-years contracts. AES address the problem of underprovision of public goods in agriculture with traditional economic incentives (based on direct cost and income foregone measures), i.e. by paying actions to protect public goods. The practices include those performed on all kinds of privately owned land: improved utilization of fertilizers, crop diversification, catch crops on arable land, peatland protection, extensive mowing and grazing, and reduction of livestock on meadows.
Additionally, we investigated some aspects of education/information. We assumed that farmers can have preferences for the characteristics of agri-environmental contracts and for the objectives of the scheme. The general understanding of the biodiversity concept is extremely limited and biodiversity does not have a positive impact on farmers’ profits (while soil or water protection can influence them significantly). The tension between farmers and ecologists signals that biodiversity can even have a negative impact on agricultural profits. We think that a reminder (an educational/information campaign for farmers) about positive external impact of agri-environmental practices may work as an incentive. Obviously, the issue of knowledge impact and its measurement is complicated, as this is just a single motivating factor. Provision of information and even knowledge itself may not cause change in behavior, as people may not act upon this knowledge. The information needs to be relevant to a target group and accompanied by options to change behavior, which is an enabling factor. In this context, we measured the impact of information about impacts of applicable agi-environmental measures that are already in place and could be potentially changed or introduced on the farms. We test this on a representative sample of farmers in the sector under study.