Do farmers favor increasing or decreasing payments over stable ones in Agri-Environmental Schemes?
Alexandre Sauquet  1@  , Douadia Bougherara, Raphaele Preget  2@  , Margaux Lapierre@
1 : Center for Environmental Economics of Montpellier
Institut national de recherche pour l’agriculture, l’alimentation et l’environnement (INRAE)
2 : CEE-M, Montpellier
Univ. Montpellier, CNRS, Institut national de la recherche agronomique (INRA), Montpellier SupAgro

Nearly all Agri-Environmental Schemes (AES) today offer stable annual payment over the duration of the contract. Yet, AES are often intended to be a transition tool, planned to trigger a change of practices and not to support it indefinitely. Offering decreasing sequence of payment thus appears particularly attractive. The standard discounted utility model supports this idea by predicting that individuals should prefer decreasing sequence of payments if total sum of outcomes is constant. Nevertheless, the literature shows that numerous mechanisms, such as anticipatory pleasure, loss aversion, or increasing productivity, can on the reverse lead individuals to prefer increasing sequence of payments. To understand the preferences of farmers over various potential sequences of payments, we propose a review of the mechanisms enlighten by the literature in psychology and economics. We then test the preference for stable, increasing or decreasing payments through a choice experiment survey. In this survey, farmers are proposed hypothetical contracts rewarding the planting of cover crops. To reduce the hypothetical bias, the choice cards were designed as a result of repeated interactions with local stakeholders. 123 French farmers, about 15\% of the contacted farmers, answered the survey. Overall, farmers do not present a clear willingness to depart from the usual stable payments. Nevertheless, 17\% declare that increasing sequences of payment are their favorite ones. Moreover, there is a significant rejection of decreasing payments from farmers with a lower discount rates or more willing to take risks than the median farmer, contradicting the discounted utility model.


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