How to increase the effectiveness of agri-environmental subsidy schemes through knowledge of farmer perceptions-a choice experiment on pesticide free buffer zones

Danish farmers have been far less interested in agri-environmental subsidy schemes than anticipated. We use choiceexperiments to estimate 486 Danish farmers’ preferences for a number of policy relevant scheme-characteristics.Subsidy schemes for pesticide free buffer zones along hedgerows are used as a case and analysed using a randomparameter logit framework. By quantifying farmers’ preferences in monetary values, we are able to assess the relativeimportance of individual scheme-characteristics. Farmer’s assessments of the administrative burden are captured byestimating how they value free-of-charge assistance for the application procedure. To our knowledge, this measure ofadministrative burden has not been tested before. Our results indicate that payment size was perceived to be the mostimportant scheme characteristic narrowly followed by flexible contract terms (an option to cancel the contract andcontract length) and still of significant importance but less so are practical management restrictions (choice of bufferzone width, using fertilizer, and reduced administrative burden).