MODELING FARMERS PREFENCES FOR AGRIENVIRONMENTAL SCHEME DESIGN: A SPANISH CASE STUDY

Agri-environmental schemes (AES) have had a limited effect on European agriculture due to farmer’s reluctance to participate in them. Information on the role that AES design can have on encouraging farmers to participate can be an important input into the design of such policies. This paper investigates farmers’ preferences for different design options related to a specific AES in Spain using a mixed logit error component choice experiment approach allowing for preference heterogeneity and correlation amongst the non status quo alternatives. In particular, findings show farmers preference for greater flexibility in scheme implementation, presence of a fixed-rate payment per contract and additional advisory services. However, heterogeneity in the value of the AES attributes across regions and farmers is significant. The results show that there is room for improvement in current AES design that will lead to higher adoption rates however, farmer reluctance to AES sign-up is still substantial.